Q2 2024 Redwire Corp Earnings Call

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Greetings and welcome to the Red White space second quarter 'twenty 'twenty four earnings call. At this time all participants are in a listen only mode. A brief question answer session will follow the formal presentation.

Jeff <unk>: If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad. As a reminder, this conference is being recorded it is now my pleasure to introduce your host Jeff <unk> Senior Vice President financial planning and analysis and Investor Relations. Please proceed.

Jeff <unk>: Thank you Tania and good morning, everyone welcome to read by our second quarter 2024 earnings call. We hope that you have seen our earnings release, which we issued yesterday afternoon and it has also been posted in the Investor Relations section of our website at Red wire space Dot com.

Can you remind everyone that during the call read my our management may make forward looking statements that reflect our beliefs expectations intentions or predictions of the future.

Our forward looking statements are subject to risks and uncertainties that are described in more detail on slide two.

Additionally to the extent, we discuss non-GAAP measures during the call. Please see slide three our earnings release or the Investor presentation on our website for the calculation of these measures and their GAAP reconciliations.

I am just doing Red why our senior Vice President of financial planning analysis, and Investor Relations. Joining me on today's call are Peter Cuneo, Chairman and Chief Executive Officer, and Jonathan Bayless, Chief Financial Officer with that I would like to turn the call over to Pete Pete.

Pete: Thank you Jeff during today's call I will take you through a discussion of our key accomplishments in the second quarter 2020 for.

Speaker Change: Jonathan will then present the financial highlights for the same period after which we will open the floor for Q&A.

Please turn to slide six.

The second quarter of this year was another excellent quarter for Red wire during which we continued our positive momentum in the first quarter. We once again delivered year over year revenue growth and positive adjusted EBITDA, while delivering a strong performance in bids submitted and contracts Award.

Good.

During the second quarter, we achieved $78 $1 million in revenue a 30% improvement over Q2 2023. It was another strong quarter for revenue.

We had positive adjusted EBITDA of $1 $6 million, we improved ending liquidity of $55.8 million as of June 30th 'twenty 'twenty four.

We had $114 $4 million contracts awarded during the quarter with a last 12 months or LTM book to Bill of 1.28 times.

We had a net loss of $18 $1 million for the quarter, which includes a $9 million negative impact due to an increase in the private warrant fair value.

And finally, we had positive L. P. M net cash provided by operations of $5 $7 million as of the second quarter of 2024.

It's important to note that we were able to achieve these strong financial results, while simultaneously investing in new technologies, expanding production capacity and ensuring corporate infrastructure throughout the first half of the year.

Unknown Executive: We continue to balance near-term results with long-term growth, moving up the value chain. Some sensors come from our avionics and sensors core offering, which includes spacecraft subsystems and components that are used for navigation, control, and imagery collection. The managed system will be developed at Redwire's Luxembourg facility and will enable crucial logistics operations on the lunar surface, such as offloading, precise pointing, and retrieval of objects and positioning of the lander. Robotic arms are part of our Structures and Mechanisms core offering, which includes a variety of space infrastructure that provides critical mechanical functionality for on-orbit operations, from launch release mechanisms and deployable booms to berthing and docking systems.

Unknown Executive: Continue to balance near-term results with long-term growth. Please turn to slide 7.

We continue to balance near term results with long term growth.

Unknown Executive: Please turn to slide seven.

Unknown Executive: Each quarter, we outline Redwire's growth strategy as a framework for our performance. Our 2024 plan is centered around four key principles, protecting the core, which means continuing to deliver on our strong foundation of existing products with proven reliability and demonstrated flight heritage. It is about continuing the growth momentum of our successes in 2023 and scaling production, which means winning and delivering on increasingly larger orders to meet growing demand and moving up the value chain.

Unknown Executive: Each quarter, we outlined red wires, Chris Jarratt strategy as a framework for our performance. Our 2024 plan is centered around four key principles.

Unknown Executive: Protecting the core which means continuing to deliver on our strong foundation of existing products with proven reliability and demonstrated flight heritage. It's about continuing the growth momentum of our successes in 2023.

Unknown Executive: Scaling production, which means winning and delivering an increasingly larger orders to meet growing demand.

Unknown Executive: Moving up the value chain.

Unknown Executive: This means leveraging our proven capabilities in developing and deploying space subsystems and components in the next generation of spacecraft and integrated mission payload. And finally, venture optionality, which means continuing to pursue breakthrough developments in advanced technologies that could create new markets with game-changing potential. Over the next few slides, I'll discuss examples of successes in each of these key growth areas from the second quarter of 2024, including an in-depth look at our progress in moving up the value chain growth area. Please turn to slide 8.

Unknown Executive: This means leveraging our proven capabilities in developing and deploying space subsystems and components and the next generation spacecraft and integrated mission payloads.

Unknown Executive: And finally venture Optionality, which means continuing to pursue breakthrough developments on advanced technologies that could create new markets with game changing potential.

Unknown Executive: Over the next few slides ill discuss examples of successes in each of these key growth areas from the second quarter of 2024, including an in depth look at our moving up the value chain growth area.

Unknown Executive: Please turn to slide eight.

Unknown Executive: Starting with our protecting the core growth area, during the second quarter, Redwire is proud to have supplied fine and coarse sun sensors for the National Oceanic and Atmospheric Administration's GOES-U satellite, which launched on June 25th and is intended to provide sophisticated weather and solar activity monitoring. This is the fourth satellite in the GOES-R family for which Redwire has supplied these critical guidance, navigation, and control components. Some sensors come from our avionics and sensors core offering, which includes spacecraft subsystems and components that are used for navigation, control, and imagery collection.

Unknown Executive: Starting with our protecting the core growth area. During the second quarter Red wire is proud to have supplied fine and of course on sensors for the national Oceanic and atmospheric administration goes use satellite, which launched on June 25th and is intended to provide sophisticated weather and solar activity monitoring.

Unknown Executive: This is the fourth satellite and that goes our family for which Red wire has supplied these critical guidance navigation and control components.

Unknown Executive: Some sensors come from our avionics and sensors core offering which includes spacecraft subsystems and components that are used for navigation control and imagery collection.

Unknown Executive: Also, during the second quarter, Redwire was awarded a contract by the European Space Agency to develop a robotic arm prototype for ESA's Argonaut lunar lander called Manus. The MANiSH system will be developed at Redwire's Luxembourg facility and will enable crucial logistics operations on the lunar surface, such as offloading, precise pointing, and retrieval of objects and positioning of the lander. Robotic arms are part of our Structures and Mechanisms core offering, which includes a variety of space infrastructure that provides critical mechanical functionality for on-orbit operations, from launch release mechanisms and deployable booms to berthing and docking systems. Please turn to slide nine.

Unknown Executive: Also during the second quarter Red wire was awarded a contract by the European Space Agency to develop a robotic arm prototypes for he says argue not lunar lander called Manish. The managed system will be developed at Red wires, Luxembourg facility and willing enable crucial logistics operations on the lube.

Unknown Executive: Surface, such as Offloading precise pointing and retrieval of objects and positioning of Atlanta.

Unknown Executive: Robotic arms are part of our structures and mechanisms core offering which includes a variety of space infrastructure that provides critical mechanical functionality for our on orbit operations from lunch release mechanisms and deployable than Berthing and docking systems.

Unknown Executive: Please turn to slide nine.

Unknown Executive: Looking at our scaling production growth principle, this quarter, we announced another order for our rollout solar array or ROSA wings for Thales Alenia Space's Space Inspire Satellites, the company's newest product line of geo-telecommunication satellites. Our participation on the project was initiated last year, and additional orders underscored that this is a growing area of the business with recurring revenue potential. Rollout solar arrays fall within our power generation core offering, which includes solar arrays and power distribution systems that generate the necessary power for space systems to operate regardless of size or location.

Unknown Executive: Looking at our scaling production worth principal this quarter, we announced another order for a rollout solar array or roasted wings for Telus Alenia space space inspire satellite the company's newest product line of G O telecommunications satellite.

Unknown Executive: Our participation on the project was initiated last year and additional orders underscored that this is a growing area of the business with recurring revenue potential.

Unknown Executive: Rollout solar rays fall within our power generation core offering which includes solar arrays and power distribution systems that generate the necessary power for space systems to operate regardless of size or location.

Unknown Executive: Throughout the second quarter of 2024, Redwire continued to execute on antenna production. It has delivered over 50 flight antennas and has more than 180 additional antennas in development for multiple government missions. Antennas are part of our radio frequency systems core offering, which includes the systems and payloads that enable space to space and space to earth communication. Please turn to slide 10. Turning to our Venture Optionality Growth Principle, in the second quarter, we continued our amazing breakthroughs in microgravity, starting with the successful bioprinting of live human heart tissue using our 3D biofabrication facility, or BFF, on the International Space Station. 3D printed live human heart tissue could eventually be used to create heart patches as a treatment for damaged heart tissue and opens the door to more effective personalized medicine in the future.

Unknown Executive: Throughout the second quarter of 2024 Red wire continued to execute unintended production Red wire has delivered over 50 flight antennas and has more than 180 additional tenants in development for multiple government missions.

Unknown Executive: Antennas are part of our radio frequency systems core offering which includes the systems and payloads that enables space to space and space to Earth Communications.

Unknown Executive: Please turn to slide 10.

Unknown Executive: On the next BFF mission, Redwire plans to 3D print human blood vessels in space. Also, in the second quarter, our Pillbox 3 experiment that examined various crystal molecules designed for pharmaceutical use in partnership with Butler University successfully returned from the International Space Station for analysis on Earth. In addition, we have now launched four additional drug manufacturing investigations in our pillbox system.

Unknown Executive: Turning to our Venture Optionality Growth Principle, in the second quarter, we continued our amazing breakthroughs in microgravity, starting with the successful bioprinting of live human heart tissue using our 3D biofabrication facility, or BFF, on the International Space Station. 3D printed live human heart tissue could eventually be used to create heart patches as a treatment for damaged heart tissue and opens the door to more effective personalized medicine in the future.

Unknown Executive: Turning to our venture Optionality growth principle in the second quarter, we continued our amazing breakthroughs in microgravity, starting with the successful bio printing of life human heart tissue using our three D bio fabrication facility or BFS on the international space station.

Unknown Executive: Three D printed life human hard tissue could eventually be used to create heart patches as a treatment for damaged heart tissue and opens the door to more effective personalized medicine in the future.

Speaker Change: On the next P. F F mission Red wire plant to three D printed human blood vessels in space.

Unknown Executive: Also in the second quarter, our pillbox three experiment that examined various crystal molecules designed for pharmaceutical use and partnership with Butler University successfully returned from the international space station for analysis on Earth. In addition, we have now launched four additional drug manufacturing invest.

Unknown Executive: Negation and our pillbox system.

Unknown Executive: These new investigations flew to the International Space Station on board the NG-21 commercial resupply mission on August 4th. Finally, we are also excited to announce Excessolibro Pharma, a company focused on developing new small molecule drugs to treat bone disease, as one of our commercial partners for an upcoming pillbox mission expected to launch later this year. Please turn to slide 11.

Unknown Executive: These new investigations flew to the international space station onboard the N V 21 commercial resupply mission on August 4th.

Unknown Executive: Finally, we are also excited to announce excessively borough pharma a company focused on developing new small molecule molecule drugs to treat bone disease as one of our commercial partners for an upcoming pillbox mission expected to launch later this year.

Unknown Executive: Please turn to slide 11.

Unknown Executive: Next, on the following few slides, I would like to provide a more in-depth look into our third principle, moving up the value chain, by focusing on Redwire's leadership in developing and providing VLEO capabilities to enhance defense and intelligence operations. In Q2, we achieved a major milestone in our VLEO SaberSat strategy with the award of a Prime Flight Contract from the Defense Advanced Research Projects Agency, or DARPA, on the Ott As the prime mission integrator for DARPA's Otter Program, Redwire is responsible for the development of a revolutionary air-breathing satellite that will demonstrate the use of novel electric propulsion systems in VLEO, which is a major validation from the market.

Unknown Executive: Next on the following few slides I would like to provide a more in depth look into our third principle moving up the value chain.

Speaker Change: Focusing on Red wires leadership in developing and providing the leo capabilities to enhance defense and intelligence operations.

Unknown Executive: In Q2, we achieved a major milestone in our VLEO SaberSat strategy with the award of a Prime Flight Contract from the Defense Advanced Research Projects Agency, or DARPA, on the Otter Program. We have received very positive market reception, including the award of the Prime Flight Program from DARPA, and this has further validated our movement up the value chain through our VLEO offerings. This prime contract for Sabersat provides Redwire with a funded program and critical customer to advance our design to flight in this new and exciting domain, showcasing our heritage. Our first study contract for the European Space Agency's SkimSat program was announced in June 2022.

Unknown Executive: In Q2, we achieved a major milestone in our Viva Leo Sabre sat strategy with the award of a prime flight contract from the Defense Advanced Research projects agency or DARPA on the auto program.

Unknown Executive: As the Prime mission integrator for DARPA is honor program Red wire is responsible for the development of our revolutionary Air breathing satellite that will demonstrate the use of novel Electric propulsion systems and V. Live. This is a major validation from the market.

Unknown Executive: Very Low Earth Orbit, or VLEO, bridges the gap between air and space and provides opportunities for better performance in Earth observation and communication. Redwire has two platforms to bring this untapped orbit from concept to full scale operations, SaberSat in the United States and Phantom in Europe. These platforms are both designed to overcome the challenges of operating in VLEO, such as atmospheric drag, while providing strategic advantages, including the following. Resilience. As satellites in VLEO operate in an unimpaired environment above airborne anti-access and area denial defenses and below the threats in LEO, spacecraft in VLEO complement unmanned aerial systems and LEO satellites by providing an additional operating environment that gives greater resiliency to overhead defense and intelligence operations because of proximity.

Unknown Executive: Very low Earth orbit or Leo bridges, the gap between air and space and provides opportunities for better performance and Earth observation and communications.

Unknown Executive: Red wire has two platforms to bring this untapped orbit from concept to full scale operations Sabre sat in the United States and Phantom and Europe. These.

Unknown Executive: These platforms are both designed to overcome the challenges of operating in V live such as atmospheric drag, while providing strategic advantages, including the following.

Unknown Executive: Resiliency.

Speaker Change: As satellites and V. Leo operates in an unimpaired environment above airborne anti access area denial defenses and below the threats and Leo space craft and be Leo complement unmanned aerial system and Leo satellite like providing an additional operating environment that gives greater resilience.

Unknown Executive: To overhead defense and intelligence operations.

Unknown Executive: Proximity.

Unknown Executive: By operating at a lower altitude, VTOLEO spacecraft are twice as close to the action on the ground and therefore better able to provide the potential for higher fidelity resolution for Earth observation and strong signals for communications while better optimizing performance and cost. Mobility. The increased drag in VLEO enables spacecraft to rapidly maneuver within their orbit to provide a more dynamic operational environment that can rapidly move that satellite into a variety of positions to optimize mission requirements and sustainability.

Unknown Executive: By operating at a lower altitude video space craft are twice as close to the action on the ground and therefore better able to provide the potential for higher fidelity resolution first observation and strong signals for communications, while better optimizing performance and cost.

Unknown Executive: Mobility, the increase Dragon V. Leo enable spacecraft to rapidly maneuver within their orbit to provide a more dynamic operational environment that can rapidly moved that satellite into a variety of positions to optimize mission requirements.

Unknown Executive: By operating closer to Earth's atmosphere, VLEO operations significantly reduce the orbital debris issue. When a VLEO spacecraft ceases to operate, atmospheric drag will rapidly deorbit the spacecraft, and the material will burn up in Earth's lower atmosphere.

Unknown Executive: And sustainability by operating closer to Earth's atmosphere V. Leo operations significantly reduce the orbital debris issue when a V Leo Spacecrafts ceases to operate.

Speaker Change: Atmospheric drag will rapidly de orbit the spacecraft and the material, we will burn up in earnest slower atmosphere, lely, a with a self cleaning orbit and therefore considerably more sustainable over time.

Unknown Executive: VLEO is a self-cleaning orbit and therefore considerably more sustainable over time. We have received very positive market reception, including the award of the Prime Flight Program from DARPA, and this has further validated our movement up the value chain through our VLEO offerings. This prime Contract for Sabersat provides Redwire with a funded program and critical customer to advance our design to flight in this new and exciting domain.

Unknown Executive: We have received very positive market reception, including the award of the Prime flight program from DARPA and this has further validated our movement of the value chain through our video offerings. This prime contract per se, but that provides red wire with a funded program and critical.

Unknown Executive: <unk> to advance our design to fly and this new and exciting domain.

Unknown Executive: Turning to slide 12.

Unknown Executive: With two platforms to bring this untapped orbit from concept to full-scale operations, both in the United States and abroad, Redwire's operations in VLEO are a testament to the power of our heritage plus innovation strategy, showcasing our heritage. Our first study contract for the European Space Agency's SkimSat program was announced in June 2022. The SkimSat program is a VLEO satellite mission that aims to reduce the cost of Earth observation and telecommunications while increasing performance by operating at substantially lower altitudes.

Unknown Executive: With two platforms to bring this untapped orbit from concept to full scale operations, both in the United States and abroad Red wires operations in V. Leo are a testament to the power of our heritage plus innovation strategy.

Unknown Executive: Showcasing our heritage our first study contract for the European Space Agency's skin sat program was announced in June 2022.

Unknown Executive: The skin that program is a V. Leo satellite mission that aims at reducing the cost of Earth observation and telecommunications, while increasing performance by operating at substantially lower altitudes.

Unknown Executive: With this award, we have been working to mature our spacecraft design. And in May of 2024, we unveiled our phantom platform for the first time. Phantom is being developed for Skinset out of our Belgian office, and as we have said before, the potential for this transformative program is extraordinary.

Unknown Executive: With this award, we have been working to mature our spacecraft design, and in May of 2024, we unveiled our phantom platform for the first time. Phantom is being developed for Skinset out of our Belgian office, and as we have said before, the potential for this transformative program is extraordinary. As Redwire moves up the value chain, we are very excited that SaberSat and Phantom expand Redwire's offering of full satellite system development and operations, which include the Redwire International Probe Satellite.

Unknown Executive: This award we have been working to mature with this award we have been working to mature our spacecraft design and in May of 2024, we unveiled our Phantom platform for the first time.

Unknown Executive: Phantom is being developed for skin set out of our Belgian office and as we have said before the potential for this transformative program is extraordinary.

Unknown Executive: We announced our SaberSAP platform in March of 2024 and announced our first BLEO study award in May. Later, during the second quarter, we then announced that Redwire was selected for the Otter Program. As the prime contractor, Redwire will be responsible for building the SaberSAP bus, advancing the critical technologies necessary for the mission, and integrating, coordinating, and leading the team for the project. As Redwire moves up the value chain, we are very excited that SaberSat and Phantom expand Redwire's offering of full satellite system development and operations, which include the Redwire International Probe Satellite. With now three spacecraft platforms, we are well positioned for future growth. Please turn to slide 13.

Unknown Executive: We announced our Sabre SAP platform in March of 2024 and announced our first <unk> study award and met later during the second quarter. We then announced that Red wire was selected for the auto program as the prime contractor Red wire will be responsible for building the Sabres have us advancing the critical technology.

Unknown Executive: It's necessary for the mission and integrating coordinating and leaving the team for the project.

Unknown Executive: As red wire moves up the value chain, we're very excited that sabre sat and Phantom expand red wires offering a full satellite system development and operations that include the Red wire International Probus satellite with now three space craft platforms, we are well positioned for future growth.

Unknown Executive: With now three spacecraft platforms, we are well positioned for future growth. Now, turning to our contract awards and backlog. Our contract awards during the second quarter of 2024 were $114.4 million. It was an excellent quarter for bookings at Redwire. Our last 12 months' book to bill ratio was 1.28 times for the second quarter of 2024. As we continuously reinforce, we often see lumpy contract awards growth from quarter to quarter, but we are continuing to maintain a positive growth rate on an annual basis.

Unknown Executive: Please turn to slide 13.

Unknown Executive: Now turning to our contract awards and backlog. Our contract awards during the second quarter of 2024 were $114.4 million. It was an excellent quarter for bookings at Redwire. This is a 226% sequential increase in bookings compared to the previous quarter. Our last 12 months' book-to-bill ratio was 1.28 times for the second quarter of 2024.

Unknown Executive: Now turning to our contract awards and backlog or contract awards. During the second quarter of 2024 were $114 $4 million. It was an excellent quarter for bookings at Red wire.

Unknown Executive: This is a 226% sequential increase in bookings compared to last quarter.

Unknown Executive: Our last 12 months book to Bill ratio was 1.28 times for the second quarter of 2024, as we continuously reinforced we often see lumpy contract Award awards growth from quarter to quarter, but we are continuing to maintain a positive growth rate on an annual basis.

Unknown Executive: As we continuously reinforce, we often see lumpy contract awards growth from quarter to quarter, but we are continuing to maintain a positive growth rate on an annual basis. As you can see on the lower right-hand side of this slide, our contracted backlog has increased 29.9% year over year to a total of $354.3 million. The growth in contracted backlog is one of many factors that gives us confidence in our future growth.

Unknown Executive: As you can see on the lower right hand side of this slide our contracted backlog has increased 29, 9% year over year to a total of $354.3 million.

Unknown Executive: The growth in contracted backlog is one of the many factors that gives us confidence in our future growth. As you can see on the upper right-hand side of this slide, this represents a significant increase of 288.5% over the corresponding year-to-date period ended June 30, 2023.

Unknown Executive: The growth in contracted backlog is one of many factors that gives us confidence in our future growth.

Unknown Executive: Finally, we continue to have a healthy pipeline with an estimated $5.7 billion of identified opportunities, including approximately $1.9 billion in proposals submitted year to date as of June 30, 2024. As you can see on the upper right-hand side of this slide, this represents a significant increase of 288.5% over the corresponding year-to-date period ended on June 30, 2023. This growth is a result of our efforts to increase the average size of the individual opportunities we are pursuing.

Unknown Executive: Finally, we continue to have a healthy pipeline with an estimated five $7 billion of identified opportunities, including approximately $1.9 billion in proposals submitted year to date as of June 32024.

Unknown Executive: As you can see on the upper right hand side of this slide this represents a significant increase of 288, 5% over the corresponding year to date period ended in June 30th 2023.

Unknown Executive: This growth is a result of our efforts to increase the average size of the individual opportunities we are pursuing.

Unknown Executive: For example, we are now bidding on individual programs in the $100 million plus award value on a more regular basis. Although there is no guarantee that we will win these opportunities, we now have a pipeline of bids that can result in a substantial increase in backlog if we land some of these larger opportunities. Please turn to slide 14. With that said, I'd now like to turn the call over to Jonathan Baliff, Redwire's Chief Financial Officer. Jonathan?

Unknown Executive: For example, we are now bidding on individual programs in the $100 million plus award value on a more regular cadence.

Unknown Executive: Although there is no guarantee we will win these opportunities. We now have a pipeline of bids that Rick can result in a substantial increase in backlog if we land some of these larger opportunities.

Unknown Executive: Yeah.

Unknown Executive: Please turn to slide 14.

Unknown Executive: With that I.

Jonathan Balas: I'd now like to turn the call over to Jonathan Balas Red wires, Chief Financial Officer Jonathan.

Jonathan Baliff: Thank you, Pete. Before I turn to the financial results, I'd like to highlight this photo on the slide, which is of the groundbreaking ceremony for Redwire's 30,000 square foot microgravity payload development and space operations facility. This facility, located within the Nova Park Innovation and Technology Campus in Floyd County, Indiana, is an investment in state-of-the-art facilities and supports our cutting-edge space biotechnology programs that Pete spoke about last quarter, making it possible for the biopharma industry to achieve game-changing outcomes in space.

Speaker Change: Thank you Pete before I turn to the financial results I'd like to highlight this photo on the slide which is of the groundbreaking ceremony for Budweiser is 30000 square foot microgravity payload development and space operations facility.

Unknown Executive: This facility located within the Nova Park innovation and technology campus in Ford County, Indiana.

Speaker Change: Is an investment in state of the art locations and supports our cutting edge space biotechnology programs that Pete spoke about last quarter, making it possible for the biopharma industry tricky game changing outcomes in space.

Jonathan Baliff: Turn to slide 15. Our second quarter and first half of 2024 results demonstrated the positive momentum with which we entered this year. Quarterly revenue was a record for the second quarter of $78.1 million. We also achieved positive adjusted EBITDA for the quarter of $1.6 million. We will discuss the drivers of this quarter's adjusted EBITDA on subsequent slides, but note that it was negatively affected by EAC adjustments of $3.1 million. This also impacted our Q2 net loss, which was also impacted by other one-off items, such as a $9.0 million, or 14 cents per share, loss associated with the change in fair value of warrants on a non-tax basis.

Unknown Executive: Turning to slide 15.

Unknown Executive: Our second quarter and its first half of 'twenty 'twenty four results demonstrated the positive momentum with which we entered this year.

Unknown Executive: Quarterly revenue was a record for our second quarter of $78 1 million. We also achieved positive adjusted EBITDA in the quarter of $1 $6 million.

Unknown Executive: We will discuss the drivers of this quarter's adjusted EBITDA on subsequent slides, but note that it was negatively affected by EAC adjustments of $3 1 million.

Speaker Change: This also impacted our Q2 net loss, which was also impacted by other one off items, such as a $9.0 million or <unk> 14 per share basis loss associated with change in fair value of warrants on a noncash basis.

Jonathan Baliff: On this page, as you can see in the lower left-hand box, we experienced significant growth in backlog and bids, submitting $1 billion more in the second quarter year over year for a total of $1.3 billion of submitted bids in the second quarter of 2024. Finally, although we had a use of cash from operations of $9.5 million during the second quarter of 2024, and as we said on previous calls, our quarterly cash results can be lumpy.

Unknown Executive: On this page as you can see in the lower left hand box, we experienced significant growth in backlog and bid submitted $1 billion more in the second quarter year over year for a total of $1 $3 billion of submitted bids in the second quarter of 2024.

Unknown Executive: Finally, although we had a use of cash from operations of $9 $5 million during the second quarter 2024, and as we said on previous calls our quarterly cash results can be lumpy. So, but when you look at the last 12 months or on an LTM basis, we achieved an increase of $33 million in cash from operations on a year over.

Jonathan Baliff: So when you look at the last 12 months, or on an LTM basis, we achieved an increase of $33 million in cash from operations on a year-over-year basis. As a result, second quarter LTM cash from operations was a positive $5.7 million. And this allowed for an increased level of investment to fund growth, as we're going to talk about in 2024. These second quarter results are attributable to the capability and commitment of our global team members and our clients' confidence in Redwire as we satisfy their growing demand for space infrastructure. Please turn to slide 16.

Unknown Executive: Year basis as a result.

Unknown Executive: Second quarter LTM cash from operations was a positive $5 7 million and this allowed for the increased level of investments to fund growth as we're going to talk about in 2024.

Unknown Executive: These second quarter results were attributable to the capability and commitment of our global team members and our clients confidence in red wire as we satisfy their growing demand for space infrastructure.

Unknown Executive: Please turn to slide 16. Please turn to slide 17.

Unknown Executive: Please turn to slide 16.

Jonathan Baliff: Specifically for quarterly revenue, as you can see from the chart on the right, this quarter's revenue of $78.1 million is a 30% increase on a year-over-year basis and represents both a record second-quarter revenue for Redwire as well as the second-highest revenue quarter in the company's history. On a year-to-date basis, 2024 was $165.9 million as of June 30, 2024, and this represents a Finally, during the quarter and similar to past years, revenue and backlog have a solid backing, with more than 91% of our revenue derived from funding government programs or from global marquee customers for delivering in the areas of national security, satellite proliferation, and the exploration of space, to just name a few.

Unknown Executive: Specifically for quarterly revenue as you can see from the chart on the right. This quarter's revenue of $78 $1 million is a 30% increase on a year over year basis and represents both a record seven second quarter revenue for Red bar as well as the second highest revenue quarter in the company's history.

Unknown Executive: On a year to date basis, 2024 was $165 $9 million as of June 32024, and this represents a 41.0 increase over the first half of 2023.

Unknown Executive: Finally during the quarter and similar to past years, the revenue and backlog has a solid backing with more than 91% of our revenue derived from funding government program or from global marquee customers, we're delivering in the areas of National security satellite proliferation, and the exploration of space to just name a few.

Unknown Executive: Please turn to slide 17.

Jonathan Baliff: On a quarterly basis, Redwire achieved positive adjusted EBITDA of $1.6 million in Q2 2024. And on a last 12 months basis, or LTM basis, Redwire achieved a 94.6% increase in LTM adjusted EBITDA from $6.5 million in Q2 2023 to $12.6 million in Q2 2024. Adjusted EBITDA was previously impacted by results in gross profit and gross margin. Gross profit was $13 million in the second quarter of 2024, with quarterly gross margins at 16.6%. These results were primarily impacted by $3.1 million in EAC adjustments during the second quarter. These adjustments are largely resulted from unplanned design and tech cycles required to meet customer requirements on many contracts.

Unknown Executive: On a quarterly basis red wire achieve positive adjusted EBITDA of $1 $6 million in Q2, 2024, and then the last 12 months basis or LTM basis read where achieved a 90 494, 6% increase in LTM adjusted EBITDA from $6 $5 million in Q.

Unknown Executive: 2023 to $12 6 million in Q2 2024.

Unknown Executive: Adjusted EBITA was previously impacted by results in gross profit and gross margin gross profit was $13 million in second quarter of 2024 with quarterly gross margins at 16, 6%.

Unknown Executive: These results were primarily impacted by $3 $1 million and EAC adjustments during the second quarter. These adjustments are largely resulted from unplanned design and tech cycles required to meet customer requirements on many quad contracts.

Jonathan Baliff: Offsetting these gross margin declines, our quarterly adjusted EBITDA performance was supported by excellent cost control and the continued operating leverage driven by scale as Redwire's SG&A expenses were 23.2% of revenue, a meaningful drop from 29.4% in last year's second quarter. We can continue to drive tens of millions of dollars in revenue increases with much lower growth in SG&A on a year-over-year basis. And that's the benefit of operating leverage and scale kicking in. Please turn to slide 18.

Fred: Offsetting these gross margin declines our quarterly adjusted EBITDA performance was supported by excellent cost control and the continued operating leverage driven by scale as Fred wires SG&A expenses were 23, 2% of revenue a meaningful drop from 29, 4% in last year 2023 second quarter.

Unknown Executive: We can continue to drive tens of millions of dollars in revenue increases with much lower growth in SG&A on a year over year basis, and thats the benefit of operating leverage and scale kicking in.

Unknown Executive: Please turn to slide 18.

Jonathan Baliff: Throughout the second quarter, we continue to make large investments to support the revenue growth we spoke about and create industry-leading innovation and global business scale. For example, during the year-to-date period through June 30, 2024, we made $4.1 million in capital expenditures, plus $2.8 million in investments in internal research and development, and $1.8 million in a variety of other corporate investments that mostly flow through the SG&A line. We continue to demonstrate our ability to financially perform now, while also making investments for future growth, risk reduction, and profitability, all while maintaining high levels of liquidity. Please turn to slide 19.

Unknown Executive: Throughout the second quarter, we continued to make large investments to support the revenue growth, we spoke about and create industry, leading innovation and global business scale.

Unknown Executive: During the year to date period through June 30 of 2024, we made $4 $1 billion of capital expenditures plus $2 $8 million in in investments in internal research and development and $1 $8 million in a variety of other corporate investments that mostly flow through the SG&A line.

Unknown Executive: We continue to demonstrate our ability to financially perform now while also making investments for future growth risk reduction and profitability all way all while maintaining high levels of liquidity.

Unknown Executive: Please turn to slide 19.

Unknown Executive: Similar to last quarter, and on the left-hand chart, we show operating and free cash flow. As a reminder, free cash flow provides a metric based on our U.S. GAAP cash from operations minus capital expenditures. For the second quarter 2024, net cash used in operating activities was a use of $9.5 million, and free cash flow was also a use of $11.2 million. However, on a last 12-month basis, we have achieved a significant improvement from net cash used in operating activities of $27.3 million on an LTM basis to cash provided by operating activities this quarter of $5.7 million on an LTM basis.

Unknown Executive: Similar to last quarter and on the left hand chart, we show operating and free cash flow as a reminder, free cash flow provides a metric based on our U S. GAAP cash from operations minus capital expenditures.

Unknown Executive: For the second quarter 2024, net cash used in operating activities was a use of $9.5 million, and free cash flow was also a use of $11.2 million. However, on a last 12 month basis, we have achieved significant improvement from net cash used in operating activities of $27.3 million on an LTM basis to cash provided by operating activities this quarter of $5.7 million on an LTM basis. As you can see on the right-hand chart, this yields available cash and cash equivalents of $30.8 million as of June 30, 2024, with $55.8 million in total available liquidity, a 54.1% increase over June 30, 2023. Please turn to slide 20 for a brief discussion on the outlook for the remainder of 2024.

Unknown Executive: For the second quarter 2024, net cash used in operating activities was a use of $9 $5 million and free cash flow.

Unknown Executive: So we use of $11 $2 million. However, on a last 12 month basis, we have achieved significant improvement from that net cash used in operating activities of $27 $3 million on an LTM basis to our cash provided by operating activities this quarter of $5 $7 million on an LTM basis.

Unknown Executive: As you can see on the right-hand chart, this yields available cash and cash equivalents of $30.8 million as of June 30, 2024, with $55.8 million in total available liquidity, a 54.1% increase over June 30, 2023. Please turn to slide 20 for a brief discussion on the outlook for the remainder of 2024. We delivered another quarter of strong performance, and as a result, for 2024, we reaffirm full year revenue at $300 million, which represents a 23% year over year growth rate.

Unknown Executive: As you can see on the right hand chart. This yield available cash and cash equivalents of $38 million as of June 30 of 2024 with $55 8 million and total available liquidity, a 54, 1% increase over June 32023.

Unknown Executive: Please turn to slide 20 for a brief discussion on the outlook for the remainder of 2024.

Unknown Executive: We delivered another quarter of strong performance and as a result for 2024, we affirm our full year, we reaffirm full year revenue at $300 million, which represents a 23% year over year growth rate on.

Unknown Executive: On a year-to-date basis, we have achieved 55% of our $300 million annual revenue guidance forecast. Finally, through our excellence in execution initiatives, we continue to focus on improving our program management and reducing EAC volatility, while also creating more operating leverage and cost efficiency to continue on our path to profitability.

Unknown Executive: On a year to date basis, we have achieved 55% of our $300 million annual revenue guidance forecast.

Unknown Executive: Finally through our excellence in execution initiatives, we continue to focus on improving our program management and reduce the EAC volatility, while also creating more operating leverage and cost efficiency to continue on our path to profitability.

Unknown Executive: I will now turn the presentation back over to Pete to provide brief final remarks Pete.

Peter Cannito: Thanks, Jonathan. Please turn to slide 21. With that, I want to thank all of Redwire's team for their contributions to this quarter's results. We will now open the floor for questions.

Unknown Executive: Thanks, Jonathan Please turn to slide 21.

Speaker Change: With that I want to thank all of Red wires team for their contributions to this quarter's results. We will now open the floor for questions.

Unknown Executive: Okay.

Operator: Thank you. We will now conduct a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start key. Once again, that's star number one to ask a question at this time. One moment while we post our first question. Our first question comes from Griffin Boss with B. Reilly. Please proceed.

Unknown Executive: Thank you. We will now conduct a question and answer session. If you would like to ask a question, please press Star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key.

Speaker Change: Thank you we will now conduct a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad.

Unknown Executive: Confirmation tone will indicate your line is in the question queue you.

Unknown Executive: You May press Star two if you would like to remove your question from the queue.

Unknown Executive: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Unknown Executive: Once again Thats star one to ask a question at this time, one moment, while we poll for our first question.

Unknown Executive: Our first question comes from Christian Buss with B Riley. Please proceed.

Unknown Executive: Okay.

Griffin Boss: Hi, good morning, Pete, Jonathan, thanks for taking my questions. So first, I just want to start off where you guys left off on the reaffirmed guidance. With the big 2Q beat on the top line, the guide is implying a much softer second half versus the first half. And I know, obviously, you know, the results get lumpy in the first quarter due to outsize benefit from long lead items. But just given the strong bookings, I guess I'm surprised to see a muted outlook for the back half of the year. Can you just elaborate on your perspective there? And then perhaps with that outlook in mind, how do you view margin expectations in the back half of the year relative to the first half?

Unknown Executive: Hi, Good morning, Pete Jonathan Thanks for taking my questions. So first for me just want to start off with where you guys left off on the reaffirmed guidance with the big <unk> beat on the topline. The guide is implying a much softer second half versus first half.

Speaker Change: I know, obviously you know it.

Speaker Change: Our results get lumpy in the first quarter had outsized benefit from long lead items, but just given the strong bookings I guess I'm surprised to see a muted outlook for the back half of the year can you just elaborate on your perspective, there and then perhaps with that outlook in mind, how how you view margin expectations in the back half of the year relative to the first half.

Peter Cannito: Yeah, hey, Griffin. Thanks for your question. I wouldn't call it muted.

Unknown Executive: Yeah, hey, Griffin. Thanks for your question. So I wouldn't call it muted. I mean, we set a plan for the year at $300 million. And in the first quarter, we talked about how

Unknown Executive: Yeah, Hey, Griffin Thanks for your question so.

Speaker Change: I wouldn't call. It muted I mean, we've set a plan for the year at $300 million and in the first quarter, we talked about how.

Speaker Change: We had some some lumpiness associated with material buys on the on the Dallas Rosa contract. So that added some revenue.

Speaker Change: Revenue for the first quarter.

Speaker Change: That won't.

Unknown Executive: It won't be regular run time associated with the remainder of the year, but we.

Peter Cannito: I mean, we've set a plan for the year at $300 million, and in the first quarter, we talked about how we had some lumpiness associated with material buys on the Dallas-Rosa contract, so that added some revenue to the first quarter that won't be regular runtime associated with the remainder of the year. But we like where we are for the year, and we're executing against our plan as a result. So with that, we're constantly doing what I call strategic balance in the company.

Unknown Executive: So we like where we are for the year.

Unknown Executive: And and we're executing against our plan as a result and.

Unknown Executive: So with that.

Unknown Executive: We're constantly.

Speaker Change: Doing what I call strategic balance in the company when you think about our emerging market like space.

Peter Cannito: When you think about an emerging market like space, our team is constantly, and what I think is doing effectively, a really good job of strategic balance, finding that Goldilocks position between revenue growth, profitability, and investing for the future, while maintaining what I think is a prudent level of liquidity. So, you know, we have our plan for $300 million a year, and we're on track to do that. But, at the same time, we have to make sure that we're balancing that growth trajectory with our ability to deliver.

Unknown Speaker: Unknown Speaker

Speaker Change: Our team is constantly and what I think is doing effectively a really good job of strategic balance finding that goldilocks position between revenue growth.

Unknown Executive: Our profitability and investing for the future.

Unknown Executive: While maintaining a what I think is a prudent level of liquidity so.

Unknown Executive: We have our plan for a $300 million a year and we're on beacon to do that while at the same time, we got to make sure that we're balancing that growth trajectory with our ability to deliver.

Operator: Greenings, and welcome to the Redwire Space 2nd quarter 2024 earnings call. At this time, our participants are in a listen only mode. A brief question and succession will follow the formal presentation.

Unknown Executive: On our programs as well as continue our investments as well.

Operator: If anyone should require operator assistance during a conference, please press star zero on your telephone keypad. As a reminder, this comp is being recorded.

Unknown Speaker: And Griffin said it was 23% correct.

Unknown Executive: Griffith.

Griffin: It's 23% growth Griffin year over year.

Jeff Zeunik: It is now my pleasure to introduce your host, Jeff Zeunik, Senior Vice President, Financial Planning, and Analysis, and Investor Relations. Please proceed. Thank you, Latanya, and good morning, everyone.

Speaker Change: It is not.

Unknown Speaker: Keep going Griffin, that's a good question. I just meant relative to the first half, but I understand what you're saying, and I appreciate the color. And then Jonathan, obviously it's going to come as no surprise that I'm going to dig into the EAC adjustments again. You mentioned it a little bit, but can you just give a little bit more color on the mix there in the second quarter and where those adjustments are primarily coming from, whether it was primarily one program or several? That would be helpful.

Speaker Change: But keep keep going Griffin.

Unknown Executive: I just I just meant relative to the first half, but I understand what youre, saying and I appreciate the color and then Jonathan obviously.

Jeff Zeunik: Welcome to Redwire 2nd quarter 2024 earnings call. We hope that you have seen our earnings release, which we issued yesterday afternoon. It has also been posted in the Investor Relations section of our website at redwirespace.com. Let me remind everyone that during the call, Redwire Management may make four looking statements that reflect our beliefs, expectations, intentions, or predictions of the future. Our four looking statements are subject to risks and uncertainties that are described in more detail on slide 2.

Griffin: It comes as no surprise I'm going to dig into the EAC adjustments again, you mentioned it a little bit but can you just give a little bit more color on the mix there in the second quarter and where those adjustments are primarily coming from whether it was you know primarily one program are several.

Speaker Change: That'd be helpful.

Unknown Executive: Yeah, this quarter was, you know, these small adjustments spread over a larger number of contracts. There's not just one contract.

Jonathan Baliff: Yeah, this quarter was, you know, these small adjustments spread over a larger number of contracts. There's not just one contract.

Speaker Change: Yeah. This this quarter was.

Speaker Change: These small adjustments spread over.

Unknown Executive: A larger number of contracts so theres not one.

Unknown Executive: Contract and again, I'll, let Pete talk a little bit more about it but.

Unknown Executive: And again, I'll let Pete talk a little bit more about that. But you know, when we look at the balance that Pete's talking about and do a number of things, we're continuing to deliver for clients. And we're doing, you know, really what I consider is, you know, Yeoman's work in being able to put some of these large contracts in place. And on a percentage basis, although you'd have to look at it, you know, from last year to this year, you know, we're still looking at, on a percentage basis, the EAC is smaller on a percentage basis of revenue this year than it was on an LTM basis last year.

Jonathan Baliff: And again, I'll let Pete talk a little bit more about that. But you know, when we look at the balance that Pete's talking about and do a number of things, we're continuing to deliver for clients. And we're doing, you know, really what I consider is, you know, Yeoman's work in being able to put some of these large contracts in place. And on a percentage basis, all you'd have to look at it, you know, from last year to this year, you know, we're still looking at on a percentage basis, the EAC is being smaller on a percentage basis of revenue this year than it was on an LTM basis last year.

Jeff Zeunik: Additionally, to the extent we discussed non-gap measures during the call, please see slide 3, our earnings release, or the Investor presentation on our website for the calculation of these measures and their gap reconciliation. I am Jeff Zeunik, Redwire Senior Vice President of Financial Planning, Analysis, and Investor Relations.

Speaker Change: When we look at the.

Unknown Executive: The balance that Pete's talking about and doing a number of things.

Unknown Executive: Continuing to deliver for clients and we're doing really what I consider is.

Unknown Executive: Yeoman's work and being able to put some of these large contracts in place and on a percentage basis, so you'd have to look at it.

Peter Knido: Joining me on today's call are Peter Knido, Chairman, and Chief Executive Officer, and Johnson Bayless Chief Financial Officer. With that, I would like to turn the call over to Pete. Pete? Thank you, Jeff. During today's call, I will take you through a discussion of our key accomplishments in the second quarter of 2024. Jonathan will then present the financial highlights for the same period after which we will open the floor for Q and A.

Unknown Executive: From last year to this year, we're still looking at on a percentage basis. The EAC is being smaller on a percentage basis of revenue. This year than it was on an LTM basis last year. So we're continuing to work on it.

Jonathan Baliff: So, you know, we continue to work on it. We don't believe it has a big impact on cash flow and other things like that. We're continuing to move forward, you know, on improving our profitability and scaling. That's why you see SG&A, you know, continuing to be a focus area for us. But again, it wasn't just any one contract.

Unknown Executive: So, you know, we're continuing to work on it. We don't believe it has a big impact on cash flow and other things like that. We're continuing to move forward, you know, on improving our profitability and scaling. That's why you see SG&A, you know, continuing to be a focus area for us. But again, it wasn't just any one contract.

Pete: We don't believe it has a big impact on cash flow and other things like that we're continuing to move forward on improving our profitability and scaling. That's why you see the SG&A continuing to be a focus area for us, but again it wasn't any one contract.

Unknown Executive: And again, I'll go back to this idea of strategic balance, right? So we had 30% year over year revenue growth. You have to execute on that and expand accordingly. So we're comfortable with where it is as a percentage of total revenue. But in a highly technical complex, some might say hard industry like space, you're going to run into small bumps along the way when you're growing at 30% year over year. So we have to balance out that revenue growth with our operational execution. And that's exactly the kind of levers Jonathan, myself, and the team are working on every day.

Peter Cannito: And again, I'll go back to this idea of strategic balance, right? So we had 30% year over year revenue growth. You have to execute on that and expand accordingly. So we're comfortable with where it is as a percentage of total revenue. But in a highly technical complex, some might say hard industry like space, you're going to run into small bumps along the way when you're growing at 30% year over year. So we have to balance out that revenue growth with our operational execution. And that's exactly the kind of levers Jonathan, myself, and the team are working on every day.

Unknown Executive: And again I'll go back to this idea of strategic balance right. So we had 30% year over year revenue growth.

Peter Knido: Please turn to slide 6. The second quarter of this year was another excellent quarter for Redwire during which we continued our positive momentum from the first quarter. We once again delivered year-over-year revenue growth and positive adjusted EBITDA while delivering a strong performance in bid submitted and contracts awarded. During the second quarter, we achieved 78.1 million dollars in revenue, a 30% improvement over Q2 2023. It was another strong quarter for revenue. We had positive adjusted EBITDA of $1.6 million.

Unknown Executive: You got to execute on that and expand accordingly, so we're comfortable with where it is as a percentage of total revenue.

Unknown Executive: But in a highly technical complex.

Unknown Executive: Some might say hard industry like space Youre going to run into.

Unknown Executive: Small bumps around along the along the way when youre growing at a 30% year over year. So we got to balance out that revenue growth with our operational execution and that's exactly the kind of levers.

Unknown Executive: Jonathan myself and the team.

Peter Knido: We improved ending liquidity of $55.8 million as of June 30th, 2024. We had $114.4 million in contracts awarded during the quarter with a last 12 months or LTM booked a bill of 1.28 times. Hunt. We had a net loss of $18.1 million for the quarter, which includes a $9 million negative impact due to an increase in the private warrant fair value. And finally, we had positive LTM net cash provided by operations of $5.7 million as of the second quarter of 2024.

Unknown Executive: We're working on every day.

Unknown Speaker: Sure, I got it. Thanks for that. And then last one for me, and I'll jump back in the queue, maybe more broadly. Obviously, the US presidential election has been a particular topic of interest in the conversations that we've been having. I think, generally speaking, it's probably safe to say there's bipartisan support for space funding, but we'd love to hear directly your thoughts on how you're handicapping the implications of a Republican or Democratic administration for Redwire and maybe the industry in general. Yeah, no.

Speaker Change: Sure got it thanks for that and then last one for me and I'll jump back in the queue, maybe more broadly that obviously the U S. Presidential election has been a particular topic of interest in conversations that we've been having I think generally speaking, it's probably safe to say there's bipartisan buy.

Speaker Change: Artisan support for space funding, but would love to hear directly your thoughts on on how you're handicapping the implications of a Republican or Democratic administrations for Red wire and maybe the industry in general.

Unknown Executive: Yeah, no, it's an interesting question. We're not really handicapping it. Like you said, we believe space is a bipartisan imperative. You know, our focus is staying in the swim lanes that are must-dos, like national security. I think we've talked about this on previous calls, but for those who are tracking space as an emerging warfighter domain, these are things regardless of administration that the country is going to have to invest in.

Peter Cannito: Yeah, no, it's an interesting question. We're not really handicapping it. Like you said, we believe space is a bipartisan imperative. You know, our focus is staying in the swim lanes that are must-dos, like national security, which I think we've talked about on previous calls. But for those who are tracking space as an emerging warfighter domain, these are things regardless of administration that the country is going to have to invest in. I'd also remind everybody that roughly a third or 29%, or in that order, it fluctuates quarter by quarter, but a fair amount of our revenue comes from overseas. So our diversification, as we've talked about numerous times, is one of Redwire's biggest strengths in terms of resiliency, regardless of who's ultimately sitting in the Oval Office.

Jonathan: Yeah, no. It's a interesting question, we're not really handicapping. It like you said, we believed spaces a bipartisan imperative.

Unknown Executive: Our focus is.

Peter Knido: It's important to note that we were able to achieve these strong financial results while simultaneously investing in new technologies, expanding production capacity, and maturing corporate infrastructure throughout the first half of the year. We continued to balance near-term results with long-term growth. Please turn to slide 7.

Unknown Executive: <unk>.

Unknown Executive: Staying in the swim lanes that are must dos like National Security I think we've talked about on previous calls, but for those who are tracking space as they.

Unknown Executive: And emerging Warfighter domain. These are things regardless of an administration that.

Speaker Change: He is going to have to invest in I'd also remind everybody that.

Peter Knido: Each quarter, we outlined Redwire's Grotesque Strategy as a framework for our performance. Our 2024 plan is centered around four key principles, protecting the core, which means continuing to deliver on our strong foundation of existing products with proven reliability and demonstrated white heritage. It's about continuing the growth momentum of our successes in 2023. Scaling production, which means winning and delivering an increasingly larger orders to meet growing demand. Moving up the value chain, this means leveraging our proven capabilities in developing and deploying space subsystems and components in the next generation spacecraft and integrated mission payloads.

Speaker Change: Roughly a third or 29% or in that order it fluctuate quarter by quarter, but.

Peter Knido: And finally, venture optionality, which means continuing to pursue breakthrough developments on advanced technologies that could create new markets with gain-changing potential. Over the next few slides, I'll discuss examples of successes in each of these key growth areas from the second quarter of 2024, including an in-depth look that are moving up the value chain growth area. Please turn to slide 8. Starting with our protecting the core growth area, during the second quarter, Redwire is proud to have supplied fine and coarse sun sensors for the National Oceanic and Atmospheric Administration's GOES-U satellite, which launched on June 25th and is intended to provide sophisticated weather and solar activity monitoring.

Speaker Change: A fair amount of our revenue comes from overseas.

Unknown Executive: So our diversification as we've talked about numerous times is one of red wires.

Unknown Executive: Strength in terms of resiliency.

Unknown Executive: <unk>.

Speaker Change: At least sitting in the oval office.

Unknown Executive: Okay.

Unknown Speaker: Great, excellent. Yeah, that's perfect. I'll hop back in the queue. Thanks for taking my questions. I appreciate it.

Speaker Change: Great excellent yeah, that's that's perfect I'll hop back in the queue. Thanks for taking my questions I appreciate it.

Gregory Konrad: The next question comes from Greg Konrad with Jeffries. Please proceed.

Speaker Change: The next question comes from Brett Conrad with Jefferies. Please proceed.

Speaker Change: Good morning.

Peter Cannito: Hey, Greg. Maybe just to start with the submitted bids. I mean, you called out more hundred million dollar plus programs within that 1.9 billion number. I mean, any more color in areas where you're seeing this opportunity and just thinking about noticeable trends between maybe commercial versus more government work as you submit, you step up your game.

Greg: Hey, Greg.

Speaker Change: Maybe just to start with the submitted bids I mean, you called out more $100 million plus programs within that $1 9 billion number I mean any more color in areas, where you're seeing this opportunity and just thinking about noticeable trends between maybe commercial versus more government work as he submit.

Speaker Change: You step up your estimates.

Peter Cannito: Yeah, I mean, in terms of where it's coming from, it's a mix. So there are scalable opportunities across all of the different Targeted Market Segments. So, yeah, it's a mix of those different things.

Unknown Executive: Yeah, I mean, in terms of where it's coming from, it's a mix. So there are Targeted Market Segments, and the two predominant flavors.

Speaker Change: Yeah, I mean in terms of where it's coming from it it's a mix.

Unknown Executive: So there's a.

Speaker Change: <unk> opportunities across all of the different.

Unknown Executive: Our targeted market segments.

Unknown Executive: So so yeah, it's a mix of those different things I think.

Unknown Executive: <unk>.

Peter Cannito: I think the two predominant flavors are directly tied to two of our core growth principles for 2024, scaling production and moving up the value chain, right. So as part of our scaling production, we're going after a larger quantity, larger quantity orders of our existing projects, right? So they're, you know, as these things start to take root in the marketplace, as the constellations that I know you're aware of, continue to scale. We mentioned, for instance, the antenna work we do for the government. As those scale, our order quantities grow, and that results in bigger bid submissions.

Unknown Executive: The two predominant flavors.

Speaker Change: All of these directly tied to two of our core growth principles for 2020 for scale.

Peter Knido: This is the fourth satellite in the GOES-R family, for which Redwire has supplied these critical guidance navigation and control components. Sun sensors come from different environments that are used for navigation, control, and imagery collection. Also during the second quarter, Redwire was awarded a contract by the European Space Agency to develop a robotic arm prototype for East's Argonaut Lunar Lander called Manus. The Manus system will be developed at Redwire's Luxembourg facility and will enable crucial logistics operations on the lunar surface, such as offloading, precise pointing, and retrieval of objects and positioning of the lander.

Speaker Change: Scaling production and moving up the value chain right. So as part of our scaling production we're going after.

Speaker Change: Your quantities.

Speaker Change: Larger quantity orders of our existing projects right. So as these things start to take root in the marketplace.

Unknown Executive: As the.

Unknown Executive: The constellations that I know Youre aware of continue to scale. We mentioned for instance, the internal work we do for the government as they scale, our order quantities grow and that results in bigger bid submissions and then of course moving up the value chain. When you start doing full spacecraft prime contracts.

Peter Cannito: And then, of course, moving up the value chain, when you start doing full spacecraft prime contracts and bidding programs of that ilk, they tend to be larger in size because you're getting the full scope of the program, as opposed to just a single subsystem.

Speaker Change: And bidding our programs of that ilk, they tend to be larger in size, because youre getting the full scope of the program.

Peter Knido: Robotic arms are part of our structures and mechanisms core offering, which includes a variety of space infrastructure that provides critical mechanical functionality for our on-orbit operations from launch-release mechanisms and deployable booms to birding and docking systems. Stems. Please turn to slide 9. Looking at our scaling production growth principle, this quarter we announced another order for our rollout solar array, or Rosa Wings, for Talice Alineas Space Inspire Satellites, the company's newest product line of geotelecommunication satellites.

Speaker Change: As opposed to just a single sub system.

Peter Cannito: And then maybe just touching on a third of the four items, the venture and optionality portfolio, it seems like there continues to be a step up in kind of positive data points around that portfolio. I mean, how do you think about the timing of that business being, you know, really meaningful and kind of the path to increased monetization, just given some of these early items that you're seeing in the market?

Unknown Executive: Okay.

Unknown Executive: And then maybe just touching on a third of the four items the intervention Optionality portfolio. It seems like there continues to be a step up of kind of positive data points around that portfolio.

Unknown Executive: How do you think about the timing of that business being really meaningful in kind of the path to increased monetization just given some of these early items that youre seeing in the market.

Unknown Executive: Okay.

Peter Cannito: Well, so we're optimistic. I mean, we're trailblazing here.

Speaker Change: Well, so we're optimistic we're trailblazing here, so there isn't a lot of context.

Peter Knido: Our participation on the project was initiated last year, and additional orders underscored that this is a growing area of the business with recurring revenue potential. Rollout solar arrays fall within our power generation core offering, which includes solar arrays and power distribution systems that generate the necessary power for space systems to operate regardless of size or location. The rest of the second quarter of 2024, Redwire continued to execute on antenna production. Redwire has delivered over 50 flight antennas and has more than 180 additional antennas in development for multiple government missions, antennas are part of our radio frequency systems core offering, which includes the systems and payloads that enable space-to-space and space-to-earth communications. Please turn to slide 10.

Speaker Change: To make a lot of data to make predictions predictions on timing so.

Unknown Executive: Don't.

Unknown Executive: As a result, but I.

Unknown Executive: And hopefully we've been able to articulate a quarter by quarter. There is a lot of momentum in this area and it's moving from.

Peter Cannito: So there isn't a lot of context to make, you know, in a lot of data to make predictions, predictions on timing. So we don't, as a result, but as hopefully we've been able to articulate quarter by quarter, there's a lot of momentum in this area, and it's moving from what could be characterized as one-off experiments more towards an emerging, regular cadence of production-like activity, particularly in pillbox. So, as the data is analyzed and as momentum builds, we continue to see, have an optimistic outlook on what we'

Unknown Executive: What could be characterized as one off experiments.

Unknown Executive: More towards an emerging.

Unknown Executive: Yeah.

Speaker Change: Regular cadence of production like activity, particularly in Bill pillbox. So.

Unknown Executive: As the data is analyzed and as momentum builds.

Unknown Executive: We continue to see have an optimistic outlook for what we're doing.

Peter Cannito: And... We're really encouraged by both repeat orders from existing partners to do more investigations, as well as an increase in the diversity of the number of different partners that are interested in working with us. So again, difficult to predict due to the first-of-a-kind trailblazing nature of the technology, and that's why we refer to it as venture optionality, but qualitatively, we have a lot of really encouraging results.

Unknown Executive: And.

Speaker Change: We're really encouraged by both the repeat orders from existing partners.

Peter Knido: Turning to our venture optionality growth principle. In the second quarter we continued our amazing breakthroughs in microgravity, starting with the successful bio printing of live human heart tissue using our 3D biofabrication facility or BFF on the International Space Station. 3D printed live human heart tissue could eventually be used to create heart patches as a treatment for damaged heart tissue and opens the door to more effective personalized medicine in the future. On the next BFF mission, Redwire planned to 3D print human blood vessels in space.

Speaker Change: To do more investigations as well as.

Speaker Change: An increase in the diversity and the number of different partners that are.

Speaker Change: Not interested in working with us so again.

Speaker Change: Difficult to predict due to the.

Unknown Executive: First of a kind trailblazing nature of the technology.

Unknown Executive: And that's why we refer to it as venture Optionality, but.

Speaker Change: Qualitatively, we have a lot of really encouraging.

Unknown Executive: Results.

Unknown Speaker: I'll leave it at two. Thank you.

Speaker Change: I'll leave it at two thank you.

Unknown Executive: Thanks.

Brian Kinstlinger: Our next question comes from Brian Kinstlinger with Alliance Global. Please proceed.

Brian Kinstlinger: Our next question comes from Brian Kinstlinger with Alliance Global. Please proceed.

Speaker Change: Our next question comes from Brian Pitz Linger with Alliance Global Please proceed.

Peter Knido: Also in the second quarter, our pillbox three experiments that examined various crystal molecules designed for pharmaceutical use in partnership with Butler University successfully returned from the International Space Station for analysis on Earth. In addition, we have now launched four additional drug manufacturing investigations in our pillbox system. These new investigations flew to the International Space Station on board the NG-21 commercial resupply mission on August 4th. Finally, we are also excited to announce Accessile Libero Farma, a company focused on developing new small molecule drugs to treat bone disease as one of our commercial partners for an upcoming pillbox mission expected to launch later this year.

Unknown Executive: Great, thanks so much. You've certainly been impressive. How are you? Good.

Unknown Speaker: Great, thanks so much. You certainly have been impressive. How are you?

Brian Kinstlinger: Great. Thanks, so much.

Speaker Change: When you say Brian is in pricing.

Speaker Change: Where are you.

Unknown Executive: You submitted an impressive $1.3 billion in proposals in the second quarter. Can you talk about capacity? I assume you're going to continue to submit bids at an accelerated pace and then maybe talk about the average win rate over the last two years and whether that's different between large proposals versus small proposals.

Unknown Speaker: You submitted an impressive $1.3 billion in proposals in the second quarter. Can you talk about capacity? I assume you're going to continue to submit bids at an accelerated pace. And then maybe you could talk about the average win rate over the last two years and whether that's different between large proposals versus smaller proposals.

Brian Kinstlinger: Okay, you submitted and in parts of $1 3 billion of proposals in the second quarter can you talk about capacity I assume youre going to continue to submit bids at an accelerated pace and then maybe talk about the aggregate win rate over the last two years and my guess that's different between large proposals versus small.

Unknown Executive: All of the proposals.

Unknown Executive: Okay.

Peter Cannito: So on the last part first, we don't we don't report our win rates, and we don't, as a result, break it down.

Unknown Executive: So on the last part first, we don't we don't report our win rates, and we don't, as a result, break it down.

Speaker Change: So on the last part first we don't we don't report our win rates and.

Unknown Executive: And we don't and as a result break it down.

Speaker Change: Of course.

Unknown Executive: Of course, being part of an emerging and highly dynamic market, I'm not sure past historic data would be relevant over time. During this early period of our growth, a year over year. As we continue to, you know, move up the value chain and increase varies from quarter to quarter, but that what's in the pipeline goes up. And we see that as encouraging towards future potential bookings.

Peter Cannito: Of course, being part of an emerging and highly dynamic market, I'm not sure past historic data would be relevant over time. During this early period of our growth.

Speaker Change: Being part of an emerging and highly dynamic market.

Speaker Change: I am not sure past historic data would be relevant over time.

Unknown Executive: During this early period of.

Peter Knido: Please turn to slide 11. Next, on following few slides, I would like to provide a more in-depth look into our third principle moving up the value chain by focusing on Redwire's leadership in developing and providing beadleo capabilities to enhance defense and intelligence operations. In Q2, we achieved a major milestone in our beadleo saber-sat strategy with the award of a prime flight contract from the Defense Advanced Research Projects Agency or DARPA on the Otter Program.

Unknown Executive: Our growth.

Peter Cannito: I think the key is in the results that you see in terms of 29.9% growth in contract contracted backlog, a year over year. As we continue to move up the value chain and increase production, it's less a function, anyway, of the percentage of individual wins that you have. It's the right wins that matter, and it's bidding the right way. That is important to us, and that's what we've been focused on.

Unknown Executive: I think the key is in the results that you see in terms of 29, 9% growth in contract contracted backlog.

Unknown Executive: Our year over year.

Unknown Executive: It is we continue to.

Unknown Executive: Move up the value chain and increase our.

Speaker Change: Production it is less a function anyways.

Unknown Executive: The percentage of.

Speaker Change: Individual wins that you have.

Speaker Change: It's the right wins that matter and its bidding the right way.

Unknown Executive: That is important to us and that's what we've been focused on and like we highlighted.

Peter Knido: As the Prime Mission Integrator for DARFA's Otter Program, Redwire is responsible for the development of a revolutionary air breathing satellite that will demonstrate the use of novel electric propulsion systems in Velio. This is a major validation from the market. Very low Earth orbit or Velio bridges the gap between air and space and provides opportunities for better performance and birth observation and communications. Redwire has two platforms to bring this untapped orbit from concept to full-scale operations, Sabersat in the United States and Phantom in Europe.

Peter Cannito: And like we highlighted, from a big capacity perspective, we're increasing the average size of our individual bids. So the number of bids varies from quarter to quarter, but what's in the pipeline goes up, and we see that as encouraging towards future potential bookings.

Unknown Executive:

Unknown Executive: A big capacity perspective.

Unknown Executive: We're increasing the average size of our individual bids.

Unknown Executive: So the number of bids.

Unknown Executive: Varies from quarter to quarter, but that.

Unknown Executive: It's in the pipeline goes up and we see that is.

Unknown Executive: Encouraging towards.

Unknown Executive: Future potential bookings.

Peter Cannito: Sorry, I meant capacity from your ability to deliver. I know you have a new facility, but if you keep increasing bids and winning, how do you think about capacity to deliver? I meant, sorry.

Speaker Change: Sorry, I meant some capacity from your ability to deliver I know you have a new facility.

Speaker Change: A few people.

Peter Knido: These platforms are both designed to overcome the challenges of operating in Velio, such as atmospheric drag, while providing strategic advantages, including the following. Resiliency As satellites in Velio operate in an unimpaired environment above airborne anti-access and area denial defenses, and below the threats in Leo, spacecraft in Velio complement unmanned aerial systems and Leo satellites by providing an additional operating environment that gives greater resiliency to overhead defense and intelligence operations. Proximity By operating at a lower altitude, Velio spacecraft are twice as close to the action on the ground and therefore better able to provide the potential for higher fidelity resolution for Earth observation and strong signals for communications while better optimizing performance and cost.

Unknown Executive: Increasing bids and winning.

Unknown Executive: How do you think about the capacity to deliver? I meant, sorry.

Speaker Change: How do you think about capacity to eat all over I meant sorry, yeah.

Peter Cannito: Yeah, yeah, yeah, no, that's a fair question. So again, going back to that idea of strategic balance, you know, when we go into a bid, we do a really detailed level of planning into what happens if we win here to make sure that we have the capacity at the ready, should we be awarded the program. So we feel pretty comfortable by the time we get to the actual bid submission portion.

Speaker Change: Yeah, Yeah, Yeah, no. That's a fair question, so again going back to that idea of strategic balance.

Speaker Change: When we go into a bid we do a really detailed level of planning into the what happens if we win here to make sure that we have the capacity at the ready.

Unknown Executive: Should we be awarded the program. So we feel pretty comfortable by the time, we get to the actual bid submission portion that.

Peter Cannito: If we're selected, we will have the capacity or the plan to execute on attaining the capacity, associated with the timeline that we submit as part of our bid. So, for instance, some really large awards may start with a design period initially that would then allow for simultaneously ramping up the physical production. It's a detailed process that we do when we go to submit a bid, and one of the gates that we have to pass for internal review is, do we ultimately have the ability to execute? And that's part of the strategic balance that we work on every day.

Speaker Change: If we are selected we will we will have to.

Unknown Executive: The capacity or the a plan to execute on it.

Unknown Executive: Painting the capacity.

Speaker Change: Proceeded with the timeline.

Unknown Executive: We submit as part of our bid. So for instance, some really large awards may start with a design period initially that would then.

Peter Knido: Mobility The increased drag and Velio enable spacecraft to rapidly maneuver within their orbit to provide a more dynamic operational environment that can rapidly move that satellite into a variety of positions to optimize mission requirements. In sustainability, by operating closer to Earth's atmosphere, Velio operations significantly reduce the orbital debris issue. When a Velio spacecraft ceases to operate, atmospheric drag will rapidly deorbid the spacecraft and the material will burn up in Earth's lower atmosphere.

Speaker Change: Allow for simultaneously.

Speaker Change: Simultaneously ramping up of the physical production.

Unknown Executive: It's a detailed process that we do when we go to submit a bid, and one of the gates that we have to pass for internal review is, do we ultimately have

Speaker Change: Site as well so so it's a detailed process that we do when we go to submit a bid and one of the gates that we have to pass for our internal review is do we ultimately have.

Unknown Executive: As the ability to execute and Thats part of this strategic balance that we work on every day.

Jonathan Baliff: But, I mean, Brian, I do want to get to the financial element of the question you're talking about. You know, when we submit these bids, we take into account most, if not, you know, a vast majority of the contract costs are obviously included in these bids. We've talked about in the past that our CapEx is quite low compared to our, you know, our revenue, and it's stayed fairly low because our clients pay for a lot of these costs to be able to get to the capacity to deliver.

Brian Kinstlinger: But I mean, Brian I, just want to get to the financial element of the question you are talking about when we submit these bids we take into account most of if not a vast majority of the contract costs are obviously included in these beds, we've talked about in the past our capex is quite low compared to our.

Peter Knido: Velio is a self-cleaning orbit and therefore considerably more sustainable over time. We have received very positive market reception, including the award of the prime flight program from DARPA, and this has further validated our movement up the value chain through our Velio offerings. This prime contract for Saberset provides RedWire with a funded program and critical customer to advance our design to flight in this new and exciting domain.

Unknown Executive: Our revenue and it stayed fairly low because our clients pay for a lot of these costs to be able to get to the capacity to deliver and we've seen this and delivered on that credibility over the past several years and as we've said to achieve the $300 million of revenue guidance, we do not believe we need to.

Jonathan Baliff: And we've seen this and delivered on that credibility over the past number of years. And as we've said, to achieve the $300 million in revenue guidance, we do not believe we need to issue any securities or anything like that. That is, again, part of the strategic bidding that we do to make sure that we're covering our costs.

Unknown Executive: Issue any securities or anything like that that is again part of the strategic bidding that we do to make sure that we're covering our costs.

Peter Knido: Turning to slide 12. With two platforms to bring this untapped orbit from concept to full scale operations both in the United States and abroad, RedWire's operations in Velio are a testament to the power of our Heritage Plus Innovation Strategy. Showtacing our heritage, our first study contract for the European Space Agency's Schinset program was announced in June 2022. The Schinset program is a Velio satellite mission that aims at reducing the cost of Earth observation and telecommunications while increasing performance by operating at substantially lower altitude.

Unknown Executive: Okay.

Peter Cannito: And then my other question related to the EACs has been a bit high for the last three quarters. And Jonathan, you mentioned it's a variety of contracts. So I'm curious how this impacts your pricing strategy going forward. Can you price fixed contracts a little higher to ensure you capture the appropriate margin?

Unknown Executive: And then my other question related to the EACs has been a bit high for the last three quarters. And Jonathan, you mentioned it's a variety of contracts. So I'm curious how this impacts your pricing strategy going forward. Can you price fixed contracts a little higher to ensure you capture the appropriate margin?

Speaker Change: And then my other question related to the EAC is had been a bit high for the last three quarters.

Unknown Executive: Jonathan you mentioned, it's a variety of contracts. So I'm curious how this impacts your pricing strategy going forward can you price fixed contracts a little higher to ensure you capture the appropriate margin.

Peter Cannito: Yeah, so we look at every bid in the context of what our financial and strategic goals are, right? So there are some things that we bid aggressively on because they can have a strategic implication that's really important to us, like, for example, maybe breaking into a new product line or a new customer.

Jonathan: Yes, so the we look at every.

Jonathan: Bad in the context of what our financial and strategic goals are right. So there are some things that we bid aggressively because it can have a strategic implication that's really important to us as an example, maybe breaking into a new.

Unknown Executive: aggressively because it can have a strategic implication that's really important to us, like, for example, maybe breaking into a new product line or a new customer. And we balance that out with, you know, some of our more mature processes.

Peter Knido: This award, we have been working to mature with this award, we have been working to mature our space craft design and in May of 2024 we unveiled our Phantom platform for the first time. Phantom is being developed for skin set out of our Belgian office and as we have said before the potential for this transformative program is extraordinary. We announced our Sabersat platform in March of 2024 and announced our first B Leo study award in May.

Speaker Change: Product line or.

Peter Cannito: And we balance that out with, you know, some of our more mature Product Swear brands, Blair. We're more in that increasing gross, you know, where the focus is more on increasing gross margins. And what we like about where we're positioned is it's a portfolio effect, right? So measuring it on a quarter by quarter basis can, if you look at it as just a snapshot or moment in time, you see this strategic balance that I'm talking about.

Speaker Change: A new customer.

Speaker Change: And we balanced that out with.

Jonathan: Some of our more mature.

Unknown Executive: Bob.

Speaker Change: Products, where.

Speaker Change: We're more than that.

Speaker Change: Increasing gross.

Speaker Change: Focus is more on increasing gross margin margins and what we like about where we're positioned as it is a portfolio effect right. So.

Peter Knido: Later during the second quarter we then announced that Redwire was selected for the Otter program. As the prime contractor Redwire will be responsible for building the Sabersat bus, advancing the critical technologies necessary for the mission and integrating, coordinating and leading the team for the project. As Redwire moves up the value chain, we are very excited that Sabersat and Phantom expand Redwire's offering a full satellite system development and operations that include the Redwire International Provost Satellite. With now three spacecraft platforms, we are well positioned for future growth.

Unknown Executive: Measuring it on a quarter by quarter basis, Ken If you look at it.

Speaker Change: As just a snapshot or moment in time.

Speaker Change: You see the strategic balance that I'm talking about.

Peter Cannito: Moving around, and that's why we talk about, you know, for instance, cash from operations over an LTM perspective, because you know, as you move, as you really grow revenue rapidly, that's going to introduce some level of challenges in operational execution. As you focus on that operational execution, then you got to balance that with your strategic growth. So I think what you're seeing is basically a snapshot in time, and some of these are just a reflection of how we're bidding to balance financial performance as well as strategic positioning in the market.

Speaker Change: Moving around and that's why we talk about.

Speaker Change: For instance, cash from operations over an LTM.

Unknown Executive: Perspective.

Speaker Change: Hey, guys.

Speaker Change: As you move as you really grow revenue rapidly that's going to introduce.

Speaker Change: Some level of <unk>.

Speaker Change: <unk> and the operational execution as you focus on that operational execution then.

Peter Knido: Please turn the slide 13. Now turning to our contract awards and backlog, our contract awards during the second quarter of 2024 were 114.4 million dollars. It was an excellent quarter for bookings at Redwire. This is a 226% sequential increase in bookings compared to last quarter. Our last 12 months booked a bill ratio was 1.28 times for the second quarter of 2024. As we continuously reinforce, we often see lumpy contract awards growth from quarter to quarter.

Jonathan: You got to balance that with your strategic growth. So I think I think what youre seeing is basically a snapshot in time.

Speaker Change: And some of these are just a reflection of.

Speaker Change: Now we are bidding to balanced financial performance as well as strategic positioning in the market.

Speaker Change: Okay. Thank you.

Brian Kinstlinger: Thanks, Brian.

Unknown Speaker: The next question comes from Andres Sheppard with Cancer Fits General. Please proceed.

Unknown Executive: The next question comes from Andres Sheppard with Cantor Fitzgerald. Please proceed.

Unknown Executive: Okay.

Andres Sheppard: Hi, good morning, everyone. Thanks for taking our questions and congratulations on the quarter. You know, you know, a lot of our key questions have been asked, but maybe to take a step back, you know, ROSA continues to make great progress. Some feedback that we are getting is that the solar industry kind of continues to experience some supply chain disruptions. So I was wondering if you could share maybe what you're seeing there, maybe the latest pricing for your solar business. Thank you.

Speaker Change: Hi, Good morning, everyone. Thanks for taking my questions and congratulations on the quarter.

Peter Knido: But we are continuing to maintain a positive growth rate on an annual basis. As you can see on the lower right hand side of this slide, our contracted backlog has increased 29.9% year-over-year to a total of 354.3 million dollars. The growth in contracted backlog is one of many factors that gives us confidence in our future growth. Finally, we continue to have a healthy pipeline with an estimated $5.7 billion of identified opportunities, including approximately $1.9 billion in proposal submitted year-to-date as of June 30, 2024.

Andrew: Thanks, Andrew.

Speaker Change: You know a lot of our key questions have been asked but I'm going to take a step back.

Speaker Change: Rosebel continues to make great progress.

Speaker Change: Some feedback that we're getting is that the solar industry.

Speaker Change: The industry continues to experience some supply chain disruptions, but just wondering if you could share maybe what youre seeing there and maybe the latest pricing for your solar business. Thank you.

Peter Cannito: So we're executing, you know, the supply chain is always something that has to be managed. I don't think it's particular, or we're not experiencing it being specific to solar arrays. Only, of course, our solar arrays aren't run of the mill, you know, put on top of your house type solar array. So we have a strategic supply chain and those supply chain partners. From my perception of where I'm sitting, I'm very pleased with the growth of ROSA and the growth that Redwire is experiencing, and so, And when we look at these bids, we're in there in the mix with critical suppliers, ensuring that they have the capacity to grow along with us, and the results are showing up in the numbers.

Jonathan: So we're executing.

Unknown Executive: You know, the supply chain is always something that has to be managed. I don't think it We're in there in the mix with critical suppliers, ensuring that they have the results are showing up in the numbers.

Speaker Change: Supply chain is always something that has to be managed.

Jonathan: I don't think it's <unk>.

Unknown Executive: Particular, we're not experiencing it being.

Unknown Executive: Specific.

Unknown Executive: The solar arrays.

Peter Knido: As you can see on the upper right hand side of this slide, this represents a significant increase of 288.5% over the corresponding year-to-date period ended in June 30, 2023. This growth is a result of our efforts to increase the average size of the individual opportunities we are pursuing. For example, we are now bidding on individual programs in the $100 million plus award value on a more regular cadence. Although there is no guarantee we will win these opportunities, we now have a pipeline of bids that can result in a substantial increase in backlog if we land some of these larger opportunities. Please turn to slide 14.

Speaker Change: Only of course, our solar arrays Arne.

Speaker Change: Run of the mill.

Unknown Executive: Put on top of your house type solar array. So we have a strategic supply chain and those supply chain partners.

Speaker Change: From from my perception of where I am sitting are very pleased with the growth of Rosa and.

Unknown Executive: The growth that red wire is experiencing and so on.

Unknown Executive: When we look at these bids.

Unknown Executive: Where we're in there in the mix with critical suppliers.

Unknown Executive: That they have that.

Unknown Executive: Capacity to grow along with us and.

Unknown Executive: The results are showing up in the numbers.

Jonathan Baliff: Yeah, I mean, when you start seeing expansion, yeah, Andres, when you start seeing expansion of an existing product or project, you're seeing that there's real demand for the amount of energy that's needed for specific satellites or spacecraft, and obviously, we do that as an opportunity, right, because of our strong relationships, our unique technologies. And so when you start seeing that expansion, you should assume that we obviously have those relationships in our supply chain to be able to again get to that capacity and then beyond.

Unknown Executive: Yes, I mean, when you start seeing expansion, yes, Andreas when you start seeing an expansion of an existing.

Jonathan Baliff: With that, I'd now like to turn the call over to Jonathan Baliff, Redwire's Chief Financial Officer. Jonathan? Thank you, Pete.

Unknown Executive: Product or project Youre seeing that there is real demand for the amount of energy thats needed for specific satellites or space craft that obviously, we view that as an opportunity right because of our strong relationships are unique technologies and so when you start seeing that expansion you.

Jonathan Baliff: Before I turn to the financial results, I'd like to highlight this photo on the slide which is of the groundbreaking ceremony for Redwire's 30,000 square foot microgravity payload development and space operations facility. This facility, located within the Nova Park Innovation and Technology campus in Floyd County Indiana, is an investment in state-of-the-art locations and supports our cutting-edge space biotechnology programs that Pete spoke about last quarter, making it possible for the biopharmate industry to achieve game-changing outcomes in space. Turn to slide 15.

Unknown Executive: You should assume that we obviously have those relationships and our supply chain to be able to again get to that capacity and then beyond.

Unknown Speaker: Got it. Thanks, guys. That's super helpful.

Unknown Executive: Got it. Thanks, guys. That's super helpful. Maybe just switching gears to venture optionality.

Speaker Change: Got it thanks, guys. That's super helpful. Maybe just switching gears to venture Optionality.

Andres Sheppard: Maybe just switching gears to venture optionality. Can you just remind us the timeline for the next Pillbox missions throughout this year? You know, how big of an emphasis are you placing on this over the long term? It seems it's becoming more and more one of your maybe core focus. So just curious about the timeline and your thoughts there. Thank you. Yeah, it's a good question.

Speaker Change: Can you just remind us the timeline for the next Billboard pillbox missions throughout this year, how big of an emphasis are you placing on this over the long term it seems it's becoming more and more as one of your maybe core focus. So just curious on the timeline and your thoughts there. Thank you yes. It's a good question. So we just launched another four so thats.

Jonathan Baliff: Our second quarter and its first half of 2024 results demonstrated the positive momentum which we entered this year. Quarterly revenue was a record for a second quarter of $78.1 million. We also achieved positive adjusted EBITDA on the quarter of $1.6 million. We will discuss the drivers of this quarter's adjusted EBITDA on subsequent slides but note that it was negatively affected by EAC adjustments of $3.1 million. This also impacted our Q2 net loss which was also impacted by other one-off items such as a $9.0 million or 14 cents per share basis loss associated with change in fair value of warrants on a non-task basis.

Peter Cannito: Yeah, it's a good question. So we just launched another four. So that's, that's, that's gonna keep us busy for a while. And, of course, there have been a lot of headlines around trips to the ISS. So yeah, so I think we're on target to continue the same operational tempo that we've been able to exhibit so far this year. And I agree with you that,

Unknown Executive: That's a that's.

Speaker Change: Going to keep us busy for a while and of course.

Speaker Change: There's been a lot of headlines around.

Speaker Change: Trips to the ISS so.

Speaker Change: So yes, so I think we're on target.

Unknown Executive: To continue the same operational tempo that we have been able to exhibit so far this year and and I agree with you that.

Unknown Executive:

Peter Cannito: It's becoming a bigger focus as we achieve more and more successes. So, you know, I'd like to emphasize that we're not this isn't the venture domain, even though we call it venture optionality. We're not losing millions and millions of dollars. In putting these up, these are customers, and we get revenue associated with them, and they have their own profitability targets. But the real potential is going to come from our ability to hit on a crystal or working with a partner to ultimately license that IP.

Speaker Change: It's becoming a bigger focus as we achieve more and more our successes. So I'd like to emphasize this is an this is an adventure.

Speaker Change: <unk>, even though we call it venture Optionality, we're not we're not losing millions of millions of dollars.

Jonathan Baliff: On this page, as you can see in the lower left-hand box, we experienced significant growth in backlog and bid submitting $1 billion more in the second quarter year over year for a total of $1.3 billion of submitted bid in the second quarter of 2024. Finally, although we had a use of cash from operations of $9.5 million during the second quarter of 2024, and as we said on previous call-up calls, our quarterly cash results can be lumpy, so when you look at the last 12 months or on an LTM basis, we achieved an increase of $33 million in cash from operations on a year over year basis.

Speaker Change: And putting these out.

Speaker Change: These are customers and we get revenue associated with these and.

Speaker Change: They have their own profitability targets.

Peter Cannito: And it's still early days. So, I think hopefully what you in the market are seeing is that we have really great momentum this year in turning this idea of pharmaceutical production into a crystallized form. It's not just for pharmaceuticals, it's for other applications as well. It's really at that nexus point from turning to just being in space experimentation to the ability to have a regular cadence, almost production-level cadence to build that out. And Redwire.

Speaker Change: But the real potential is going to come from our ability to hit on.

Crystal: Crystal or in.

Speaker Change: Working with the partner to ultimately ultimately a license that IP.

Unknown Executive: And.

Speaker Change: It's still early days so.

Speaker Change: So I think hopefully what you and the market are seeing is that we have.

Jonathan Baliff: As a result, second quarter LTM cash from operations was a positive $5.7 million. And this allowed for the increased level investment to fund growth as we're going to talk about in 2024. These second quarter results are attributable to the capability of our global team members and our clients' confidence in red wire as we satisfy their growing demand for space infrastructure. Please turn to slide 16. Specifically for quarterly revenue, as you can see from the chart on the right, this quarter's revenue of $78.1 million is a 30% increase on a year over year basis and represents both their record second quarter revenue for red wire as well as the second highest revenue quarter in the company's history.

Unknown Executive: We have In terms of being able to start pointing at revenue contribution and out years, we're just not at that level yet in the

Speaker Change: Really great momentum this year and turning this idea.

Speaker Change: Pharmaceutical production crystals on orbit and it's not just for pharmaceuticals for other.

Speaker Change: Applications as well is is really at that at this point from turning to just being in space experimentation to.

Unknown Executive: The ability to have a regular cadence almost production level cadence is to build that out and red wire.

Peter Cannito: Uh, is, uh, is at the lead in terms of the number of these things that we're putting up on a regular, what I would say business-level tempo. And that's what we're really excited about. But, in terms of being able to start pointing at revenue contribution and out years, we're just not at that level yet in the Product Life Cycle to start making those predictions.

Unknown Executive: Is.

Speaker Change: Is is that the lead in terms of.

Unknown Executive: The number of these things that we're putting up on on a regular what I would say business level tempo.

Jonathan Baliff: On a year-to-date basis, 2024 was $165.9 million as of June 30, 2024, and this represents a 41.0 increase over the first half of 2023. Finally, during the quarter and similar to past years, the revenue and backlog has a solid backing with more than 91% of our revenue derived from funding government programs or from global marquee customers who are delivering in the area to national security, satellite proliferation, and the exploration of space to just name a few, please turn to slide 17.

Unknown Executive: What really excited about but.

Unknown Executive: In terms of being able to start pointing at revenue contribution in out years, and we're just not at that.

Unknown Executive: Level yet in the.

Unknown Executive: Product lifecycle to start making those predictions.

Jonathan Baliff: I mean, the prediction we gave you is that there would be 16 additional pillbox missions in 2024. We obviously have disclosed the four that just went up. So we're continuing that accelerated cadence, because again, this time last year, we started talking about this development, it's not experimentation, it's development, and investigations of the drugs themselves. The pillbox is working, right?

Unknown Executive: I mean, the prediction we gave you is that there would be 16 additional pillbox missions in 2024. We obviously have disclosed the four that just went up. So we're continuing that accelerated cadence, because again, this time last year, we started talking about this development, it's not experimentation, it's development, and investigations of the drugs themselves. The pillbox is working, right?

Unknown Executive: I mean, the prediction we gave you.

Speaker Change: Is that there would be 16 additional pillbox missions in 2024, we obviously now have disclosed before that just went up.

Unknown Executive: So we're continuing that accelerated cadence because again this time last year. We started talking about this development is not experimentation its development investigations of the drugs themselves. The pillboxes working right we're getting.

Jonathan Baliff: On a quarterly basis, Redwire achieved positive adjusted EBITDA of $1.6 million in Q2 2024. And on a last 12 months basis or LTM basis, Redwire achieved a 94.6% increase in LTM adjusted EBITDA from $6.5 million in Q2 2023 to $12.6 million in Q2 2024. Adjusted EBITDA was previously impacted by results in gross profit and gross margin. Gross profit was $13 million in second quarter of 2024 with quarterly gross margins at 16.6%.

Jonathan Baliff: We're getting our clients, or really our partners, great results, but again, it's the development of these proteins, which we explained last quarter. So we're on track with those 16. And the only other thing I would say, Andres, is that there's been a lot of investment in the last decade in this pillbox and other parts of biopharma and personalized medicine, over $70 million in investment in this. So we're benefiting from that. There are others in the venture part of the space dealing with, you know, pharma and personalized medicine are just now starting their investment cycle; we've already got that investment in place.

Unknown Executive: We're getting our clients, or really our partners, great results, but again, it's the development of these proteins, which we explained last quarter. So we're on track with those 16. And the only other thing I would say, Andres, is that there's been a lot of investment in the last decade in this pillbox and other parts of biopharma and personalized medicine, over $70 million in investment for this. So we're benefiting from that, while others in the venture part of the space dealing with pharma and personalized medicine are just now starting their investment cycle.

Speaker Change: Our clients were really our partners.

Speaker Change: Great results, but again, it's the development of these proteins, which we explained last quarter. So we're on track with those 16 and the only thing other thing I would say Andre So as you know theres been a lot of investment the last decade, and this pillbox and other parts of the <unk>.

Unknown Executive: Biopharma and personalized medicine over $70 million.

Unknown Executive: Investments for this so we are benefiting from that where others.

Unknown Executive: And the venture part of space dealing with.

Speaker Change: Pharma and personalized medicine are just now starting their investment cycle, we've already got that investment in place and now we're starting to reap the benefits, but like Pete said, we've been very conservative both in how we talk about our revenue forecast for this year 300 million, but also how we talk to you about the venture Optionality. We believe in it obviously wouldn't have invested 70.

Jonathan Baliff: These results were primarily impacted by $3.1 million in EAC adjustments during the second quarter. These adjustments are largely resulted from unplanned design and tech cycles required to meet customer requirements on many quad contracts. Offsetting these gross margin declines, our quarterly adjusted EBITDA performance was supported by excellent cost control and the continued operating leverage driven by scale as Redwire's SGNA expenses were 23.2% of revenue, a meaningful drop from 29.4% in last year 2023 second quarter.

Unknown Executive: We've already got that investment in place, and now we're starting to reap the benefits. But like Pete said, we've been very conservative, both in how we talk about our revenue forecast for this year, $300 million, and also in how we talk to you about the venture optionality. We believe in it. Obviously, we wouldn't have invested $70 million if we didn't. But that being said, it's going to come with these new business models in space that are, frankly, mimicking the contract development and manufacture of pharma and biopharma.

Jonathan Baliff: And now we're starting to reap the benefits. But like Pete said, we've been very conservative, both in how we talk about our revenue forecast for this year of 300 million, but also how we talked to you about the venture optionality. We believe in it; obviously, we wouldn't have invested 70 million if we didn't. But that being said, it's going to come with these new business models in space that are frankly mimicking the contract development and manufacture of pharma and biopharma. Andres Sheppard, Gregory Konrad, Andres Sheppard, Gregory Konrad,

Speaker Change: And if we didn't but that being said it is going to come with these new business models in space that are frankly, mimicking a contract development and manufacturer of pharma and Biopharma.

Speaker Change: The press release, so there is a business model, that's known and knowable that will apply to space with frankly, the same clients like Lilly or our Butler University.

Jonathan Baliff: We can continue to drive tens of millions of dollars in revenue increases with much lower growth in SGNA on a year-over-year basis. And that's the benefit of operating leverage and scale kicking in. Please turn to slide 18.

Peter Cannito: Yeah, I think what Jonathan highlights is really important. If you really want to understand this aspect of the business, you have to look at it the way venture investors are looking at competitive organizations that are just getting started, don't you? If you look at the tempo, we're moving from experimentation into production. We're not at a major loss, which typically comes in a venture lifecycle of major losses around a product. We're not where we are with this by any stretch of the imagination.

Speaker Change: I think with Jonathan highlights is really important if you really want to understand this aspect of the business you got to have that you have to look at it the way the venture investors are looking at.

Jonathan Baliff: Throughout the second quarter, we continue to make large investments to support the revenue growth we spoke about and create industry leading innovation and global business scale. During the year-to-date period through June 30, 2024, we made $4.1 million in capital expenditures plus $2.8 million in investments in internal research and development and $1.8 million in a variety of other corporate investments that mostly flow through the SGNA line. We continue to demonstrate our ability to financially perform now while also making investments for future growth, risk reduction and profitability all while maintaining high levels of liquidity.

Unknown Executive: Competitive.

Speaker Change: Opportunity or competitive organizations that are just getting started right. We've been if you look at the tempo, we're moving from experimentation in that production.

Speaker Change: Not at the major loss, what typically comes in adventure lifecycle of major losses around a product that is not where we are with this aligned by any stretch of the imagination is generating revenue.

Peter Cannito: It's generating revenue. I think we have a lot of excitement and are starting to prove the market. So if you look at the analysis associated with how the valuations are being applied to those who are just getting into this area, and you look at that and try to value the potential that is embedded in Redwire associated with this segment, considering we're further down the stream in terms of turning this into a real business, you start to see the full potential.

Pete: I think we have a lot of excitement and are starting to prove out the market.

Speaker Change: So if you look at the analysis associated with how the valuations are being applied to those who are just getting into this area and you look at that and try to value. The option that is embedded in red wire associated with this segment considering we're further down.

Jonathan Baliff: Please turn to slide 19. Similar to last quarter, and on the left hand chart, we show operating and free cash flow. As a reminder, free cash flow provides a metric based on our US gap cash from operations minus capital expenditures. For the second quarter 2024, net cash used in operating activities was a use of $9.5 million and free cash flow was also a use of $11.2 million. However, on a last 12-month basis, we have achieved significant improvement from net cash used in operating activities of $27.3 million on an LTM basis to a cash provided by operating activities this quarter of $5.7 million on an LTM basis.

Pete: The stream in terms of turning this into a real business you start to you start to see the full potential.

Andres Sheppard: Got it. That's super helpful. I really appreciate all that color. Maybe I could squeeze one last one really quick. Jonathan, how should we think about the free cash flow for the rest of this year and maybe into next year? I realize, obviously, you don't guide it, but is there any color there that you might be able to provide us with? Thank you.

Unknown Executive: Got it. That's super helpful. I really appreciate all that color. Maybe I could squeeze one last one really quick. Jonathan, how should we think about free cash flow for the rest of this year and maybe into next year? I realize, obviously, you don't guide it, but is there any color there that you might be able to provide us with? Thank you.

Speaker Change: Got it that's super helpful. I really appreciate all that color, maybe if I could squeeze one last one really quick.

Unknown Executive: Jonathan how should we think about the.

Jonathan: Free cash flow for the rest of this year and maybe into next year I realize obviously, you don't guide it but any color there that you might be able to provide us with thank you.

Jonathan Baliff: You know, first of all, I appreciate you answering your own question because we don't give free cash flow or operating cash flow. I'll just give two, let's just say, aspects to at least give you some color on this and context.

Unknown Executive: You know, first of all, I appreciate you answering your own question because we don't give free cash flow or operating cash flow. I'll just give two, let's just say, aspects to at least give you some color on this and context.

Speaker Change: First of all I appreciate you answering your own question.

Speaker Change: We don't care.

Unknown Executive: Free cash flow or operating cash flow I will just give to let's just say aspects to at least give you. Some color on this in context one we.

Jonathan Baliff: As you can see on the right hand chart, this yields available cash and cash equivalents of $30.8 million as of June 30, 2024, with $55.8 million in total available liquidity, a 54.1% increase over June 30, 2023.

Jonathan Baliff: One, you know, we're very proud of the operations teams. Obviously, this is a multi-year exercise in the path to profitability, so we don't ever look at just any one quarter.

Unknown Executive: One, you know, we're very proud of the operations teams. Obviously, this is a multi-year exercise in the path to profitability, so we don't ever look at just any one quarter.

Unknown Executive: We're very proud of the operations teams. Obviously this is a multi year exercise of path to profitability. So we don't ever look at just any one quarter, we have a tendency.

Jonathan Baliff: Please turn to slide 20 for a brief discussion on the outlet for the remainder of 2024. We delivered another quarter of strong performance. And as a result for 2024, we affirm full year, we reaffirm full year revenue at $300 million, which represents a 23% year-over-year growth rate. On a year-to-date basis, we have achieved 55% of our 300 million annual revenue guidance forecast. Finally, through our excellence in execution initiatives, we continue to focus on improving our program management and reduce the EAC volatility, while also creating more operating leverage and cost efficiency to continue on our path to profitability.

Jonathan Baliff: We have a tendency, and we're, you know, kind of disclosing LTM basis to be able to generate cash from operations. We don't make any adjustments; it's cash from operations to be able to invest. And that investment includes a number of things that are in our growth strategy, such as moving up the value chain, or that's this quarter's focus or last quarter's venture optionality. Although, again, like I said, we've already invested in that a lot.

Unknown Executive: We have a tendency, and we're, you know, kind of disclosing LTM basis to be able to generate cash from operations. We don't make any adjustments; it's cash from operations to be able to invest. And that investment includes a number of things that are in our growth strategy, such as moving up the value chain, or that's this quarter's focus or last quarter's venture optionality. Although, again, like I said, we've already invested in that a lot.

Unknown Executive: Kind of disclosing LTM basis to be able to generate cash from operations, we don't make any adjustments as cash from operations to be able to.

Unknown Executive: And that investment includes.

Unknown Executive: A number of things that are in our growth strategy, such as moving up the value chain or that's this quarter's focus or last quarter's venture optionality. Although again like I said, we've already invested in that a lot. So when I talk when we talk about.

Jonathan Baliff: So when I talk, when we talk about, you know, our LTM improvement of 33 million in cash from operations, that gives us the confidence that we can invest a bit more on a full year basis, which you see what we're doing. We have a page on those types of investments that are, you know, primarily in the technology and basically commercializing the technology. But also, it's associated with creating global scale, which is why our FG&A has been coming down on an LTM basis as a percentage of revenue.

Unknown Executive: So when I talk, when we talk about, you know, our LTM improvement of 33 million in cash from operations, that gives us the confidence that we can invest a bit more on a full year basis, which you see what we're doing. We have a page on those types of investments that are, you know, primarily in the technology and basically commercializing the technology. But also, it's associated with creating global scale, which is why our SG&A has been coming down on an LTM basis as a percentage of revenue.

Unknown Executive: Our LTM improvement of $33 million in cash from operations that gives us the confidence that we can invest a bit more on a full year basis, which you see what we're doing we have a page on those types of investments that are primarily in the technology and basically commercializing the technology, but also its in.

Jonathan Baliff: I will now turn the presentation back over to Pete to provide brief final remarks. Pete, thanks Jonathan. Please turn to slide 21. With that, I want to thank all of Redwire team for their contributions to this quarter's results.

Unknown Executive: Associated with creating global scale, which is why our SG&A, it's been coming down on an LTM basis percentage of revenue. So the two things simply put our we are generating operating cash flow to make higher levels of investment and we're seeing that credibility and that we're seeing the revenue growth.

Jonathan Baliff: So the two things simply put are, we are generating operating cash flow to make higher levels of investment, and we're seeing that credibility in that we're seeing revenue growth. Like if we, you know, then we make those investments, they impact cash flow from operations on a quarterly basis, maybe one quarter, but it can be lumpy. And then when you look at it on an LTM basis, the trends are our friend. And the other piece, the second piece, which is really important, is that we continue to have high levels of liquidity, right? And that high level of liquidity allows us to also make sure that we're having a prudent capital structure and a prudent way to continue to invest.

Unknown Executive: So the two things simply put are, we are generating operating cash flow to make higher levels of investment, and we're seeing that credibility in that we're seeing revenue growth. Like if we, you know, then we make those investments, they impact cash flow from operations on a quarterly basis, maybe one quarter, but it can be lumpy. And then when you look at it on an LTM basis, the trends are our friend. And the other piece, the second piece, which is really important, is that we continue to have high levels of liquidity, right? And that high level of liquidity allows us to also make sure that we're having a prudent capital structure and a prudent way to continue to invest.

Operator: We will now open the floor for questions. Thank you. We will now conduct a question and a session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two. If you would like to remove your question from the queue. For participants who speak equipment, it may be necessary to pick up your handset before present the star keys. Once again, that star one to ask a question at this time. One moment while we pull for our first question.

Unknown Executive: So then we make those investments they impact cash flow from operations.

Unknown Executive: On a quarterly basis, maybe one quarter, but it can be lumpy and then when you look at it on an LTM basis, the trends of our friend and the other piece. The second piece, which is really important as we continue to have high levels of liquidity right in that high level liquidity allows us to also.

Unknown Executive: Make sure that we're having a prudent capital structure in a prudent way to continue to invest.

Unknown Speaker: Excellent. Thanks very much again. Congratulations on the quarter. I'll pass it on.

Speaker Change: Excellent. Thanks, very much again, congrats on the quarter I'll pass it on.

Griffin Boss: Our first question comes from Griffin Boss with B. Riley. Please proceed. Hi. Good morning, Pete. Jonathan, thanks for taking my questions. So first, for me, just want to start off where you guys left off on the reaffirmed guidance. With the big two-cube beat on the top line, the guide is implying a much softer second half. First, first half. I know obviously results get lumpy in the first quarter at outside benefit from long lead items.

Unknown Speaker: Thanks. Thank you.

Unknown Executive: Thanks. Thank you.

Speaker Change: Thank you.

Suji DeSilva: The next question comes from Suji DeSilva with Roth Capital. Please proceed. Hi Peter, hi Jonathan, and congratulations on the prize.

Suji DeSilva: The next question comes from Suji DeSilva of Roth Capital. Please proceed.

Unknown Executive: The next question comes from Tsuji Desilva with Roth Capital. Please proceed.

Unknown Speaker: Hi Peter and Jonathan. Congratulations on the progress here.

Unknown Executive: Hi, Peter Hi, Jonathan and congrats on the progress you I'll keep it to one question.

Speaker Change: Because every time someone.

Speaker Change: Someone asked about capacity earlier I wanted to drill down into the <unk>. Okay.

Suji DeSilva: Bill you have just to understand how it's going to evolve from the current programmatic sort of feel where you're designing your building a spacecraft for two or three customers I believe.

Griffin Boss: But just given the strong bookings, I guess I'm surprised to see a muted outlook for the back half of the year. Can you just elaborate on your perspective there? And then perhaps with that outlook in mind, how you view margin expectations in the back half of the year relative to the first half? Yeah. Hey, Griffin. Thanks for your question. So I wouldn't call it muted. I mean, we've set a plan for the year at $300 million.

Suji DeSilva: Is it going to return to a situation, where it's a per scrip for scrip. Thanks.

Suji DeSilva: Revenue model or is it if its program base continue on a continued basis.

Suji DeSilva: I'll keep it to one question to keep the time. Someone asked about capacity earlier. I'm going to drill down into the VLEO capability you have, and just understand how it's going to evolve from the current programmatic sort of feel where you're designing and building a spacecraft for two or three customers. Is it going to turn into a situation where it's a per-spacecraft revenue model, or is it – if it's program-based, ongoing-based? What kind of capacity do you have? How many programs can you simultaneously handle?

Unknown Executive: What kind of capacity do you have? How many programs can you simultaneously handle?

Suji DeSilva: What kind of capacity do you have how many programs simultaneously handle any thoughts there would be helpful.

Unknown Executive: Any thoughts?

Unknown Executive: So.

Unknown Speaker: Any thoughts?

Speaker Change: So if I understand your question.

Speaker Change: <unk> correctly you are asking.

Peter Cannito: So if I understand your question. Correctly, you're asking, where, whether it'll be a handful of programs or whether it's scaling. Maybe if you could just clarify a little bit, I didn't totally understand. Sure, either it's more programs layering on this one, or each program has multiple spacecraft expected to be delivered, like which way... Okay, both. I think you're going to initially see governments take the lead in this segment, and you're going to see... Investment in, Developing this next generation spacecraft capability, it will predominately be development at first, and then, much like you saw the evolution that happened, from small sats to proliferated LEO constellations, as the spacecraft come online, so from our perspective, as Phantom and SaberSat move out of the development phase and become a very stable, proven spacecraft platform, you're going to see larger and larger quantity orders increase over time.

Speaker Change: Where whether it will be a handful of programs or whether it's scaling in may.

Griffin Boss: And in the first quarter, we talked about how we had some lumpiness associated with material buys on the on the palace Rosa contract so that added some revenue to the first quarter. That won't be regular runtime associated with the remainder of the year. But you know, we like where we are for the year. And we're executing against our plan as a result. And so with that, you know, we're constantly doing what I call strategic balance in the company.

Speaker Change: If you could just clarify a little bit I didn't totally sure either either it's more programs layering on this one or each program has multiple spacecrafts.

Speaker Change: It can be delivered like which way that's right.

Unknown Executive: Okay.

Speaker Change: I think youre going to initially see governments take the lead in this segment.

Speaker Change: And youre going to see.

Speaker Change: Investment in.

Speaker Change: Developing this next generation space craft capability and no problem.

Griffin Boss: When you think about a emerging market like space, our team is constantly in what I think is doing effectively a really good job of strategic balance finding that Goldilocks position between revenue growth. , a profitability and investing for the future while maintaining what I think is a prudent level of liquidity. So, you know, we have our plan for $300 million a year and we're on beacon to do that while at the same time we got to make sure that we're balancing that growth trajectory with our ability to deliver on our programs as well as continuing our investments as well.

Speaker Change: Predominantly the development at first and then.

Speaker Change: Much like you saw the evolution that happened.

Speaker Change: In from small SaaS to proliferate as Leo constellations as the at the spacecraft come online for so from our perspective as Phantom and <unk> move out of the development phase and become a very stable proven spacecraft platform.

Speaker Change: Youre going to see larger and larger.

Speaker Change: Quantity orders increase overtime.

Speaker Change: Did that answer your question.

Unknown Speaker: It did, yeah. And just how many programs do you simultaneously have capacity for, do you think, right now, or if that, if you can think of that? Does Redwire have capacity?

Unknown Executive: It did, yeah. And just how many programs do you simultaneously have capacity for, do you think, right now, or if that, if you can think of that? Does Redwire have capacity?

Suji DeSilva: It did yes, and just how many programs you simultaneously have capacity for do you think the right now or is that you can think of as the.

Speaker Change: <unk> have capacity for <unk>.

Speaker Change: Yes sure.

Suji DeSilva: Yeah, so I'm sorry for VLEO specifically. I'm sorry, VLEO specifically, Peter. Oh, in terms of an estimate of the number of VLEO opportunities in the market, I bet you could handle them simultaneously. That we could handle them simultaneously.

Speaker Change: Yeah. So.

Unknown Executive: I'm, sorry for being late with specifically I'm, sorry, specifically Peter.

Griffin Boss: Griffin, it's 23% growth, Griffin, you're over a year. You know, but keep going, Griffin, that's good. I just meant relative to the first half, but I understand what you're saying, and I appreciate the color. And then Jonathan, obviously, it's going to come as no surprise, I'm going to dig into the EAC adjustments again. You mentioned it a little bit, but can you just give a little bit more color on the mix there in the second quarter and where those adjustments are primarily coming from, whether it was, you know, primarily one program or several that be available.

Speaker Change: Well in terms of an estimate as to the number of <unk> opportunities in the market that.

Unknown Executive: Bet you could handle them simultaneously.

Speaker Change: Bet, you could handle simultaneously I guess, yes.

Peter Cannito: Wait, so you know, as Jonathan articulated, and I understand, I apologize, the, the nice thing about when we enter into a new space like this, particularly when it's imperative for the government and, and these are predominantly in government is we're growing our capacity along with the development associated with the government programs, right? So these tend to be, you know, multi year development development programs. Where we move through key milestones like preliminary design reviews and then critical design reviews, and then develop out new technologies until we get to a stable baseline. So, during.

Speaker Change: That we could handle simultaneously weight, so as Jonathan articulated I understand and I apologize.

Speaker Change: The nice thing about when we enter into a new space like this particularly when it's imperative for the government.

Speaker Change: And these are predominantly in government is we're growing our capacity along with the development.

Unknown Executive: Associated with the government programs right. So these tend to be multi year development programs.

Griffin Boss: Yeah, this quarter was, you know, the small adjustments spread over a larger number of contracts. There's not one, you know, contract. And again, I'll let Pete talk a little bit more about it, but, you know, when we look at the balance that Pete's talking about and doing a number of things, you know, we're continuing to deliver for clients. And we're doing, you know, really what I consider is, you know, Yomans work in being able to put some of these large contracts in place.

Speaker Change: Where we move through.

Unknown Executive: Key milestones like.

Speaker Change: Preliminary design reviews and critical design reviews.

Unknown Executive: And then develop out new technologies until we get to a stable baseline so during.

Peter Cannito: There are in the early stages of development. You know, we have the ability to scale our capacity along with each new program as they come in. And we, we, we did these things with a nice cash milestone profile associated with these bids. So the bids come along with the necessary resources and time we need to scale. So I'm not going to hazard a guess at a number, but I'm not spending my night worrying about this idea that as the government continues to invest in more and more of these programs and as we go out and bid on more and more of these programs, we're going to run into a production bottleneck.

Speaker Change: Others early stages of development.

Speaker Change: We have the ability to scale our capacity along with each new program as they come in and we did these things with.

Griffin Boss: And on a percentage basis, all you'd have to look at it, you know, from last year to this year, you know, we're still looking at on a percentage basis, the EAC's being smaller on a percentage basis of revenue this year than it was on an LTM basis last year. So, you know, we continue to work on it. We don't believe it has a big impact on cash flow and other things like that.

Speaker Change: A nice cash milestone.

Speaker Change: Profile associated with these so.

Unknown Executive: It's come along with the necessary resources.

Unknown Executive: <unk>.

Unknown Executive: Time, we need to scale.

Griffin Boss: We're continuing to move forward, you know, on improving our profitability and scaling. That's why you see the SGNA, you know, continuing to be a focus area for us. But, again, it wasn't any one contract. Yeah. And again, I'll go back to this idea of strategic balance, right? So, we had 30% year over year revenue growth. You got to execute on that and expand accordingly. So, we're comfortable with where it is as a percentage of total revenue.

Speaker Change: I'm not going to hazard, a guess at a number.

Speaker Change: But I'm not spending my nights up worrying about this idea that as the government continues to invest in <unk>.

Unknown Executive: More and more of these programs and as we go out and bid on more and more of these programs that we're going to run into a production bottleneck.

Peter Cannito: Very helpful, Peter. Thank you.

Unknown Executive: Very helpful, Peter. Thank you.

Speaker Change: Okay very helpful. Thank you.

Operator: Thank you. At this time, I would like to turn the call back over to management for closing comments.

Speaker Change: Thank you at this time I would like to turn the call back over to management for closing comments.

Griffin Boss: But, in a highly technical complex, some might say hard industry like space, you're going to run into small bumps around along the way when you're growing at a 30% year over year. So, we got to balance out that revenue growth with our operational execution. And that's exactly the kind of levers Jonathan, myself, and the team are working on every day. Sure. Got it. Thanks for that. And then last one for me, and I'll jump back in the queue.

Peter Cannito: Right, well, I'd like to thank everybody for their questions; some really excellent ones.

Unknown Executive: Right, well, I'd like to thank everybody for their questions, some really excellent questions today. And again, I want to thank all the Redwire employees across the globe for just a tremendous effort in delivering these results. None of this would happen without our employees or partners or customers or teammates.

Speaker Change: Great well I'd like to thank everybody. Further question. Some really excellent question today and again I want to thank all of the Red wire employees across the globe for just a tremendous effort in delivering these results and none of this happens without.

Unknown Executive: Our employees our partners our customers our teammates.

Unknown Executive: So thank you to all of them and thank you to all of you and go Red wire.

Griffin Boss: Maybe more broadly. Obviously, the US presidential election has been a particular topic of interest and conversations that we've been having. I think generally speaking, it's probably safe to say there's bipartisan support for space funding, but we'd love to hear directly your thoughts on how you're handicapping the implications of a Republican or Democrat administration for red wire and maybe the industry in general. Yeah, no, it's an interesting question. We're not really handicapping it.

Speaker Change: Thank you. This does conclude today's teleconference. You may disconnect. Your lines at this time. Thank you for your participation and have a great day.

Unknown Executive: Okay.

Unknown Executive: Mhm.

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Griffin Boss: Like you said, we believe space is a bipartisan imperative. Our focus is staying in the swim lanes that are must-dos, like national security. I think we've talked about on previous calls, but for those who are tracking space as an emerging warfighter domain, these are things, regardless of an administration, that the country's going to have to invest in. I'd also remind everybody that But roughly a third or 29% or in that order it fluctuates quarter by quarter, but a fair amount of our revenue comes up from overseas.

Unknown Executive: Okay.

Unknown Executive: Yes.

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Griffin Boss: So our diversification, as we've talked about numerous times, is one of Redwire's biggest strengths in terms of resiliency regardless of who's ultimately sitting in the Oval Office. Great, excellent. Yeah, that's perfect. I'll hop back in the queue. Thanks for taking my questions. Appreciate it.

Unknown Executive: Yeah.

Unknown Executive: Yeah.

Gregory Konrad: The next question comes from Greg Konrad with Jeffries. Please proceed.

Unknown Executive: Yes.

Peter Knido: Good morning. Hey, Greg, maybe just to start with the submitted biz, I mean, you called out more $100 million plus programs within that $1.9 billion number. I mean, any more color in areas where you're seeing this opportunity and just thinking about noticeable trends between maybe commercial versus more government work as you submit, you step up your submits. Yeah, I mean, in terms of where it's coming from, it's a mix. So there's scalable opportunities across all of the different targeted market segments.

Peter Knido: So yeah, it's a mix of those different things. I think the two predominant flavors of these directly tied to two of our core growth principles for 2024 scaling production and moving up the value chain, right? So as part of our scaling production, we're going after larger quantities, larger quantity orders of our existing projects, right? So they're, you know, at these things start to take root in the marketplace as the constellations that I know you're aware of.

Peter Knido: Continue to scale. We mentioned, for instance, the antenna work we do for the government. So scale are ordered quantities grow and that results in bigger bid submissions. And then, of course, moving up the value chain, when you start doing full spacecraft prime contracts and bidding programs of that ilk, they tend to be larger in size because you're getting the full scope of the program as opposed to just a single subsystem. And then maybe just touching on a third of the four items, the venture optionality portfolio, it seems like there continues to be a step up of kind of positive data points around that portfolio.

Peter Knido: I mean, how do you think about the timing of that business being, you know, really meaningful and kind of the path to increased monetization just given, you know, some of these early items that you're seeing in the market? Well, so we're optimistic. I mean, we're trailblazing here. So there isn't a lot of context to make, you know, in a lot of data to make predictions on timing so we don't as a result.

Peter Knido: But as hopefully we've been able to articulate quarter by quarter, there's a lot of momentum in this area and it's moving from What could be characterized is one-off experiments more towards an emerging regular cadence of production like activity, particularly in bill box. So as the data is analyzed and as momentum builds we continue to see have an optimistic outlook for what we're doing and we're really encouraged by both repeat orders from existing partners to do more investigations as well as an increase in the diversity and the number of different partners that are interested in working with us.

Peter Knido: So again, difficult to predict due to the first-of-a-kind trail-relaising nature of the technology and that's why we refer to it as venture optionality but qualitatively we have a lot of really encouraging results. I'll leave it at two.

Operator: Thank you.

Brian Kinstlinger: Our next question comes from Brian Kinstlinger with Alliance Global, please proceed. Great, thanks so much. You submitted an impressive 1.3 billion proposals in a second quarter. Can you talk about capacity? I assume you're going to continue to submit bids in accelerated pace and then maybe talk about the average win rate over the last two years and whether that's different between large proposals versus smaller proposals. So on the last part first we don't report our win rate and we don't as a result break it down.

Brian Kinstlinger: Of course, seeing part of an emerging and highly dynamic market, I'm not sure if past historic data would be relevant over time during this early period of our growth. I think the key is in the results that you see in terms of 29.9 percent growth in contract, contracted backlog a year over year. It's we continue to move up the value chain and increase a production. It's less a function anyways of the percentage of individual wins that you have.

Brian Kinstlinger: It's the right wins that matter and it's bidding the right way that is important to us and that's what we've been focused on and like we highlighted from a big capacity perspective, we're increasing the average size of our individual bids. So the number of bids varies from quarter to quarter but that what's in the pipeline goes up and we see that is encouraging towards future potential bookings. Sorry, I make some capacity from your ability to deliver.

Brian Kinstlinger: I know you have a new facility but if you keep increasing bids and winning How do you think about capacity to deliver an event, sorry? Yeah, yeah, no, that's fair question. So again, going back to that idea of strategic balance, you know, when we go into a bid, we do a really detailed level of planning into what happens if we win here to make sure that we have the capacity at the ready, should we be awarded the program?

Brian Kinstlinger: So we feel pretty comfortable by the time we get to the actual bid submission portion that if we're selected, we will have the capacity or the plan to execute on attaining the capacity associated with the timeline that we submit as part of our bid. So for instance, some really large awards may start with a design period initially that would then allow for simultaneously ramping up of the physical production site as well.

Brian Kinstlinger: So it's a detailed process that we do when we go to submit a bid, and one of the gates that we have to pass for internal review is do we ultimately have a ability to execute and that's part of this strategic balance that we work on every day? But I mean, Brian, I do want to get to the financial element of the question you're talking about, you know, when we submit these bids, we take into account most of if not, you know, a vast majority of the contract costs are obviously included in these bids.

Brian Kinstlinger: We've talked about in the past, our CAPEX is quite low compared to our, you know, our revenue and it stayed fairly low because our clients pay for a lot of these costs to be able to get to the capacity to deliver. And we've seen this and delivered on that credibility over the past several years. And as we've said, to achieve the $300 million of revenue guidance, we do not believe we need to issue any securities or anything like that.

Brian Kinstlinger: That is, again, part of the strategic bidding that we do to make sure that we're covering our costs. Great. And then my other question relates to the EACs. It's been a bit high through the last three quarters in Jonathan, you mentioned it's a variety of contracts. So I'm curious how this impacts your pricing strategy going forward? Can you price fix contracts a little higher to ensure you capture the appropriate margin? Yeah, so we look at every bid in the context of what our financial and strategic goals are, right?

Brian Kinstlinger: So there are some things that we bid aggressively because it can have a strategic implication that's really important to us. As an example, maybe breaking into a new product line or a new customer. And we balance that out with, you know, some of our more mature products where we're more in that increasing growth, you know, where the focus is more on increasing growth margins. And what we like about where we're positioned is it's a portfolio effect, right?

Brian Kinstlinger: So measuring it on a quarter by quarter basis, can if you look at it as just a snapshot or moment in time, as you see this strategic balance that I'm talking about. I'm moving around, and that's why we talk about, you know, for instance, cash from operations over an LTM perspective because, you know, as you move, as you really grow revenue rapidly that's going to introduce some level of challenges in the operational execution.

Brian Kinstlinger: As you focus on that operational execution, then you got to balance that with your strategic growth. So, I think what you're seeing is basically a snapshot in time, and some of these are just a reflection of how we're bidding to balance financial performance as well as strategic positioning in the market. Okay. Thank you. Thanks, Brian.

Andres Sheppard: The next question comes from Andres Sheppard with Cancer Fitzgerald. Please proceed. Hi, good morning, everyone. Thanks for taking our questions and congratulations on the quarter. Thanks, Andrew. You know, you know, a lot of our key questions have been asked, but maybe to take a step back. You know, Rosa continues to make great progress. Some feedback that we are getting is that the solar industry kind of continues to experience some supply chain disruptions.

Andres Sheppard: So, just wondering if you could share maybe what you're seeing there, maybe the latest pricing for your solar business. Thank you. So, we're executing. You know, supply chain is always something that has to be managed. I don't think it's particular, or we're not experiencing it being specific to solar arrays. Only, of course, our solar arrays aren't, you know, run-of-the-mill, you know, put on top of your house type solar array. So, we have a strategic supply chain.

Andres Sheppard: And those supply chain partners from my perception of where I'm sitting are very pleased with the growth of Rosa and the growth that red wire is experiencing. And so, when we look at these vids, we're in there in the mix with critical suppliers, ensuring that they have the capacity to grow along with us. And the results are showing up in the numbers. Yeah, I mean, when you start seeing expansion, yeah, when you start seeing expansion of an existing product or project, you're seeing that there's real demand for the amount of energy that's needed for specific satellites or spacecraft.

Andres Sheppard: That, obviously, we do that as an opportunity, right, because of our strong relationships, our unique technologies. And so, when you start seeing that expansion, you know, you should assume that we obviously have those relationships in our supply chain to be able to, again, get to that capacity and then beyond. God, thanks, guys. That's super helpful.

Andres Sheppard: Maybe switching gears to venture optionality. Can you just remind us the timeline for the next pillbox missions throughout this year? How big of an emphasis are you placing on this over the long term? It seems it's becoming more and more as one of your maybe core focus, so just curious on the timeline and your thoughts there. Thank you. Yeah, it's a good question. So, we just launched another four. So, that's that's going to keep us busy for a while.

Andres Sheppard: And, of course, there's been a lot of headlines around that. Tricks to the ISS. So yeah, so I think we're on target to continue the same operational tempo that we've been able to exhibit so far this year. And I agree with you that it's becoming a bigger focus as we achieve more and more successes. So, you know, I'd like to emphasize, this isn't, this isn't venture domain, even though we call it venture optionality.

Andres Sheppard: We're not, we're not losing millions and millions of dollars in, in putting these up. These are customers and we get revenue associated with these and they have their own profitability target. But the real potential is going to come from our ability to hit on a crystal or, and working with a partner to ultimately license that IP. And it's still early days. So, so I think hopefully what you and the market are seeing is that we have a really great momentum this year in turning this idea of pharmaceutical production crystals on orbit.

Andres Sheppard: And it's not just for pharmaceuticals, it's for other applications as well. It's really at that nexus point from turning to just being in space experimentation to the ability to have a regular cave in so much production level cadence to build that out in red wire is, is, is, is, is at the lead in terms of the number of these things that we're putting up on a, on a regular, what I would say, business level tempo.

Andres Sheppard: And that's what we're really excited about. But in terms of being able to start pointing at revenue contribution and out years, we're just not at that level yet in the product life cycle to start making those predictions. I mean, the prediction we gave you and we're, you know, is that there would be 16 additional co box missions in 2024. We obviously now have disclosed the four that just went up. So we're continuing that accelerated cadence.

Andres Sheppard: Because again, this time last year, we started talking about this development, it's not experimentation. It's development investigations of the drugs themselves. The pillbox is working, right? We're getting, you know, our clients, we're really our partners, great, great results. But again, it's the development of these proteins, which we explained last quarter. So we're on track with those 16. And the only thing other thing I would say, Andre says, you know, there's been a lot of investment the last decade in this pillbox and other, you know, parts of the biopharma and personalized medicine, you know, over $70 million, you know, of investments for this.

Andres Sheppard: So we're benefiting from that. We're others in the venture part of space dealing with, you know, pharma and personalized medicine are just now starting their investment cycle. We've already got that investment in place. And now we're starting to reap the benefits. But like Pete said, we've been very conservative both in how we talk about our revenue forecast for this year, 300 million, but also how we talk to you about the venture optionality.

Andres Sheppard: We believe in it. Obviously, we wouldn't have invested $70 million if we didn't. But that being said, it's going to come with these new business models in space that are frankly mimicking a contract development and manufacturer of pharma and biopharma terrestrial. So there is a business model that's no-to-knowable that will apply to space, but frankly the same clients like a lily or a butler universe. Absolutely. Yeah, I think what Jonathan highlights is really important.

Andres Sheppard: If you really want to understand this aspect of the business, you have to look at it the way the venture investors are looking at competitive opportunities or competitive organizations that are just getting started, right? If you look at the tempo, we're moving from experimentation into production. We're not at the major of loss. What typically comes in a venture lifecycle of major losses or on a product that is not where we are with this aligned by any stretch of the imagination.

Andres Sheppard: It's generating revenue. I think we have a lot of excitement and are starting to prove out the market. So if you look at the analysis associated with how the valuations are being applied to those who are just getting into this area and you look at that and try to value the option that is embedded in Redwire associated with this segment, considering we're further down the stream in terms of turning this into a real business, you start to see the full potential. That's super helpful. I really appreciate all that color.

Andres Sheppard: Maybe if I could squeeze one last one really quick. Jonathan, how should we think about the free cash flow for the rest of this year and maybe into next year? We're like, obviously, you don't guide it, but any color that you might be able to provide us with, thank you. First of all, I appreciate you answering your own question because we don't give free cash flow or operating cash flow. I'll just give two, let's just say aspects to at least give you some color in this in context.

Andres Sheppard: One, we're very proud of the operations teams. Obviously, this is a multi-year exercise of path to profitability. So we don't ever look at just any one quarter. We have a tendency and we're kind of disclosing LTM basis to be able to generate cash from operations. We don't make any adjustments. It's cash from operations to be able to invest. That investment includes a number of things that are in our growth strategy, such as moving up the value chain, or that's this quarter's focus, or last quarter's venture optionality.

Andres Sheppard: Again, like I said, we've already invested in that a lot. When we talk about our LTM improvement of 33 million in cash from operations, that gives us the confidence that we can invest a bit more on a full-year basis. What you see what we're doing, we have a page on those types of investments that are primarily in the technology and basically commercializing the technology. But also, it's in associated with creating global scale, which is why our FGNA has been coming down on an LTM basis percentage of revenue.

Andres Sheppard: So the two things simply put are we are generating operating cash flow to make higher levels investment and we're seeing that credibility and that we're seeing the revenue growth. So then we make those investments. They impact cash flow from operations on a quarterly basis, maybe one quarter, but it can be lumpy. And then when you look at an LTM basis, the trends are our friend. And the other piece, the second piece, which is really important, is we continue to have high levels of liquidity. And that high level of liquidity allows us to also make sure that we're having a prudent capital structure and a prudent way to continue to invest. Excellent. Thanks very much again. Congrats on the quarter.

Operator: I'll pass it on. Thanks.

Suji DeSilva: The next question comes from Suji DeSilva with Roth Capital. Please proceed. Hi Peter, hi Jonathan. Congrats on the progress here. I'll keep it to one question to keep it considered time. Someone asked Michael Pasadelia, when they drill down into the VLeo capability you have, just understand how it's going to evolve from the current programmatic sort of feel, where you're designing a building of spacecraft for two or three customers, I believe. You know, is it going to return to a situation where it's a first spacecraft revenue model, or is it if it's program based continued on a continued basis?

Suji DeSilva: What kind of capacity do you have? How many programs can you simultaneously handle? Any thoughts there be helpful? If I understand your question correctly, you're asking whether it'll be a handful of programs or whether it's scaling, maybe if you could just clarify a little bit, I didn't totally. Either it's more programs layering on this one, or each program has multiple spacecrafts, expect to be delivered. Which way does it go?

Peter Knido: I think you're going to initially see governments take the lead in this segment, and you're going to see investment in developing this next generation spacecraft capability, and it'll probably, it'll predominantly be development at first, and then much like you saw the evolution that happened from small sats to proliferated Leo constellations as the spacecraft come online, so from our perspective, as phantom and sabersat move out of the development phase and become a very stable proven spacecraft platform, you're going to see larger and larger quantity orders increase over time. Did that answer your question?

Peter Knido: Yeah, and just how many programs do you simultaneously have a capacity for? Do you think, right now, or is that significant? Is there a red light or have capacity for? Yes, sure. Yeah, so, I'm sorry, for V-Leo specifically, I'm sorry, V-L-O-S-P-S-W-E-L. Oh, well, in terms of an estimate, says that the number of V-Leo opportunities in the market, that you could handle simultaneously, yes. We could handle simultaneously. So, you know, as Jonathan articulated, I don't understand I apologize.

Peter Knido: The nice thing about when we enter into a new space like this, particularly when it's imperative for the government and these are predominantly government, is we're growing our capacity along with the development associated with the government programs, right? So, these tend to be, you know, multi-year development programs where we move through key milestones like preliminary design reviews and then critical design reviews and then develop out new technologies until we get to a stable baseline.

Peter Knido: So, during other early stages of development, you know, we have the ability to scale our capacity along with each new program as they come in. And we did these things with a nice cash milestone profile associated with these bids. So, the bids come along with the necessary resources and time we need to scale. So, I'm not going to hazard a gas at a number, but I'm not spending my nights up worrying about this idea that as the government continues to invest in more and more of these programs and as we go out and bid on more and more of these programs that we're going to run into a production bottleneck. Thank you.

Peter Knido: At this time, I would like to turn the call back over to management for closing comments. Right. Well, I'd like to thank everybody for their questions and really excellent questions today. And again, I want to thank all the Redwire employees across the globe for just a tremendous effort in delivering these results. None of this happens without our employees or partners or customers or teammates. So thank you to all them and thank you to all you and go Redwire. Thank you. This does conclude today's teleconference. You may disconnect your line at this time. Thank you for your participation and have a great day.